Relevance up to 02:00 2022-10-07 UTC–4
Analysis of transactions in the EUR / USD pair
The test of 0.9984 happened when the MACD line was just starting to move above zero, which was a good signal to buy. Sadly, there was no price increase as the pair resumed falling towards 0.9930. But by the time euro tested this level, the MACD line was already far from zero, so there was no reason to sell further. Surprisingly, buying also led to losses as the pair did not reverse. Only purchases around 0.9860 managed to gain profit, albeit a little.
Euro fell yesterday morning because of weak business activity indices and composite PMI in Germany and the Eurozone. Dollar, on the other hand, surged as the employment report from ADP and foreign trade balance exceeded expectations.
There is nothing important scheduled to be released today, except for the latest minutes of the meeting of the ECB. The protocol will give light to the mood of policymakers regarding the future of interest rates, especially since it has already affected economic growth negatively. Data on industrial orders in Germany and retail sales in the Eurozone will be ignored by the market.
In the afternoon, there are also no important statistics, so everything should go quietly before tomorrow’s report on the US labor market. Weekly jobless claims and speeches of Fed members Charles Evans and Lisa Cook will come out, but they will have little effect on the market direction.
For long positions:
Buy euro when the quote reaches 0.9929 (green line on the chart) and take profit at the price of 0.9967. Growth will occur if economic reports in Germany exceed expectations and if the ECB protocol remains hawkish.
Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9908, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9929 and 0.9967.
For short positions:
Sell euro when the quote reaches 0.9908 (red line on the chart) and take profit at the price of 0.9863. Pressure may return if statistics from the Euro area are weaker than expected.
Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 0.9929, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9908 and 0.9863.
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 decision based on the current market situation is an inherently losing strategy for an intraday trader.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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