EUR/USD: Simple Trading Tips for Beginner Traders on October 29. Analysis of Yesterday's Forex Trades

[Ben Graham]

Trade Analysis and Recommendations for the Euro Currency

The first test of the price at 1.1666 occurred when the MACD indicator had moved significantly below the zero mark, limiting the upside potential of the pair. The second test at 1.1666 coincided with the MACD being in the overbought area, leading to the realization of Scenario No. 2: a sell signal, with the pair moving down by 15 pips.

In the context of a lack of economic reports due to the government shutdown in the U.S., unexpectedly positive data on consumer confidence and manufacturing activity in Richmond triggered a surge in demand for the U.S. dollar and, consequently, a decline in interest towards the euro. The absence of comprehensive economic data due to the shutdown continues to pose significant challenges for accurately assessing the current state of the economy and exacerbates instability in financial markets.

This morning, there are no macroeconomic data available for the Eurozone, reducing the likelihood of a significant recovery for the euro. Market participants are focused on the Federal Reserve's decision on interest rates. Monitoring signals for a more aggressive tapering of quantitative tightening is especially important. For this reason, until there is clarity on the Fed's actions, investors should exercise caution and consider the risks associated with sudden currency fluctuations.

Regarding the intraday strategy, I will primarily rely on implementing Scenarios No. 1 and No. 2.

Buying Scenarios

Scenario №1: Today, you can buy the euro when the price reaches around 1.1640 (green line on the chart), with a target for growth to 1.1673. At point 1.1673, I plan to exit the market and sell euros back, anticipating a move of 30-35 pips from the entry point. One can only expect growth in the euro within the framework of a correction. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting an upward move.

Scenario №2: I plan to buy euros today if the price tests 1.1620 twice while the MACD indicator is in the oversold area. This strategy will help limit the pair's downside potential and may lead to a market reversal. An increase can be expected in the opposing levels of 1.1640 and 1.1673.

Selling Scenarios

Scenario №1: I plan to sell euros once the level of 1.1620 (red line on the chart) is reached. The target will be 1.1587, where I plan to exit the market and immediately buy back (anticipating a 20-25-pip move in the opposite direction from that level). Pressure on the pair may return at any moment today. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting its downward move.

Scenario №2: I also plan to sell euros today if two consecutive tests of the price 1.1640 occur when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal. A decrease can be expected in the opposing levels of 1.1620 and 1.1587.

What's on the Charts:

• Thin Green Line: Entry price for buying the trading instrument.
• Thick Green Line: Estimated price for setting Take Profit or manually securing profits since further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the trading instrument.
• Thick Red Line: Estimated price for setting Take Profit or manually securing profits since further decline below this level is unlikely.
• MACD Indicator: Important to follow the overbought and oversold zones when entering the market.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not employing money management and are trading large volumes.

And remember, to trade successfully, you need a clear trading plan like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.

The material has been provided by InstaForex Company - www.instaforex.com