04.11.202109:10 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD on November 4

Analysis of transactions in the EUR / USD pair

Euro rose by 40 pips yesterday, thanks to the signal to buy that coincided with the MACD line being at the oversold area. It allowed traders to take long positions, provoking the increase in the pair. The main driver was the decision of the Federal Reserve to taper bond purchases starting November this year.

There will be a lot of data coming out today, especially in the Euro area. First is the report on business activity in the services sector, followed by the report on composite PMI. If these indicators show slower growth, pressure on euro will increase. But it will recover if forecasts from the European Commission point to a potential ECB policy change amid a higher inflation.

In the afternoon, US will publish its data on jobless claims, where another increase is expected. If this happens, dollar demand will decline, which will result in a rise in EUR / USD.

For long positions:

Open a long position when euro reaches 1.1597 (green line on the chart) and take profit at 1.1633. Strong EU data will push the price up.

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 1.1573, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1597 and 1.1633.

For short positions:

Open a short position when euro reaches 1.1573 (red line on the chart) and take profit at 1.1535. Weak EU data will continue the pressure observed yesterday, which was brought by the Fed policy decision that was 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 1.1597, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1573 and 1.1535.

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.