25.10.202109:09 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD on October 25

Analysis of transactions in the EUR / USD pair

There was a signal to buy in EUR / USD last Friday, but the increase was limited because the MACD line was in the wrong area. First it went far away from zero, and then it moved to the sell area. At the same time, PMI data on the Euro area turned out worse than anticipated, so pressure prevailed in the pair, resulting in a flat market.

Today, traders should monitor the business environment conditions in Germany, as well as the current situation and economic expectations. If the IFO reports that these indicators are weaker than the forecasts, another sell-off will occur in the market. And although the upcoming Bundesbank monthly report is unlikely to have any effect on euro, inflation forecasts may help bullish traders protect their positions. But volatility should remain low all throughout the day, so EUR / USD will most likely remain in a flat market.

For long positions:

Open a long position when euro reaches 1.1667 (green line on the chart) and take profit at 1.1700. Price will increase if the upcoming IFO reports exceed expectations.

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 1.1638, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1667 and 1.1700.

For short positions:

Open a short position when euro reaches 1.1638 (red line on the chart) and take profit at 1.1597. Pressure may return if IFO reports weak EU statistics.

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 1.1667, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1638 and 1.1597.

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.