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Analysis and trading recommendations for EUR/USD on October 26

Relevance up to 03:00 2021-10-27 UTC–4

Analysis of transactions in the EUR / USD pair

There was a signal to sell in EUR / USD on Monday, but the decrease was limited because the MACD line was far away from zero. Then, after that, a buy signal appeared, and this time it coincided with the MACD line being at the oversold area. This allowed traders to take long positions, provoking an 18-pip increase in the pair.

Euro fell yesterday because data from Germany turned out worse than anticipated. At the same time, the Bundesbank monthly report was greeted by traders negatively.

There is a high chance that a decline will continue today, especially since there are no EU statistics scheduled to be published. Additionally, in the afternoon, there will be reports on US consumer confidence and primary home sales, which could fuel demand for dollar if data exceed expectations. If this happens, EUR / USD will plunge to weekly lows.

For long positions:

Open a long position when euro reaches 1.1614 (green line on the chart) and take profit at 1.1652. Price will increase if the US reports a weak consumer confidence data.

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 1.1593, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1614 and 1.1652.

For short positions:

Open a short position when euro reaches 1.1593 (red line on the chart) and take profit at 1.1560. Strong US data could bring back pressure on the pair.

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 1.1614, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1593 and 1.1560.

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.

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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