21.10.202109:03 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD on October 21

Analysis of transactions in the EUR / USD pair

There was a signal to sell in EUR/USD on Wednesday, but it had to be ignored because the MACD line was far away from zero. Then, before the day ended, another sell signal appeared, and this time it provoked a decline in the pair because traders were able to take short positions, thanks to the MACD line being at the overbought area. The movement, however, was not that large.

Data released yesterday were ignored by the market because the figures completely coincided with the forecasts of economists. But in the afternoon demand for risk assets surged, thanks to the statements from Fed representatives.

This morning the market may remain calm as there are no EU statistics scheduled to be published. But by afternoon volatility may soar amid reports on US manufacturing activity, leading indicators and jobless claims. There will also be a speech from FOMC member Christopher Waller, although it may not provoke much investor interest.

For long positions:

Open a long position when euro reaches 1.1662 (green line on the chart) and take profit at 1.1696. Price may increase as the lack of EU data could help buyers break through weekly highs.

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 1.1646, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1662 and 1.1696.

For short positions:

Open a short position when euro reaches 1.1646 (red line on the chart) and take profit at 1.1618. Pressure may return if the attempt to break above the local high is unsuccessful and if there are strong macro statistics in the United States.

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 1.1662, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1646 and 1.1618.

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.