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19.10.2021 09:08 AM
Analysis and trading recommendations for EUR/USD on October 19

Analysis of transactions in the EUR / USD pair

EUR / USD rose by 10 pips on Monday morning, thanks to the signal to buy that coincided with the MACD line being at the oversold area. The scenario allowed traders to safely take long positions, thereby pushing the price up in the market. Shortly after that, the pair rose by another 10 pips amid a buy signal that appeared as the MACD line was moving up from zero. It was followed by a 35-pip increase, then a 10-pip decline.

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Weaker-than-expected data on US output led to a large decrease in dollar, which accordingly resulted in a rise in EUR / USD. At the same time, statements from ECB member Ignazio Visco provoked a surge in market volatility.

Visco said in an interview that the central bank should maintain its flexibility on the post-crisis stimulus measures, and one of the most effective ways for it is to buy debt securities issued by EU countries.

Since there are no EU statistics scheduled to be released today, traders will be attracted by the interviews of ECB members Frank Elderson and Fabio Panetta. Their statements may continue the rally in EUR / USD. But in the afternoon the situation may change amid good data on US building permits and housing construction. Speeches from Fed members Mary Daly and Michelle Bowman will also attract investor interest.

For long positions:

Open a long position when euro reaches 1.1660 (green line on the chart) and take profit at 1.1696. Price will increase if the ECB does not address inflation.

Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1635, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1660 and 1.1696.

For short positions:

Open a short position when euro reaches 1.1635 (red line on the chart) and take profit at 1.1594. Pressure may return if there are strong US statistics and if the Fed makes statements that are in favor of dollar.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1660, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1635 and 1.1594.

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What's on the chart:

The thin green line is the key level at which you can place long positions in the EUR / USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the EUR / USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

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