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Intraday Strategies for Beginner Traders on October 1


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The U.S. dollar continues to face challenges, but weak economic data from the eurozone and the United Kingdom are also limiting the upward potential of risk assets.

Yesterday, a sharp drop in the U.S. Consumer Confidence Index for September led to dollar weakness and supported the euro. The index came in significantly below analyst expectations, which were more optimistic. This unexpected decline raised fresh concerns about the economic outlook for the United States and, as a result, put pressure on the U.S. dollar. The euro, in contrast, showed resilience and strengthened against the greenback.

Today is expected to be a busy day with numerous macroeconomic events that could significantly impact financial markets. At center stage will be the release of eurozone manufacturing PMI data, the Consumer Price Index (CPI), and core inflation. Weak readings on any of these indicators could heighten concerns about the current state and prospects of the eurozone economy. In particular, investors will not only consider the overall level of inflation but also the core component, which excludes volatile elements such as energy and food prices. A decline in core prices could help the European Central Bank finalize its interest rate decision for the remainder of the year.

Another key event will be the speech by Bundesbank President Joachim Nagel. His comments on the current economic situation, inflation outlook, and future monetary policy of the ECB could significantly influence the euro's exchange rate and market sentiment.

As for the British pound, focus will be on the release of the UK manufacturing PMI. Economists are closely watching this leading indicator of economic performance. In recent months, the manufacturing sector has shown mixed results, and today's release may provide further clarity on its outlook. A strong report would support GBP and indicate economic resilience, while weak data may deepen recession fears.

If the data meet economists' expectations, a Mean Reversion strategy is more appropriate. However, if the data deviates significantly from forecasts, it may be better to use a Momentum (breakout) strategy.

Momentum Strategy (Breakout):

EUR/USD

  • Buy on breakout above 1.1770, targeting 1.1800 and 1.1820
  • Sell on breakout below 1.1740, targeting 1.1711 and 1.1680

GBP/USD

  • Buy on breakout above 1.3475, targeting 1.3495 and 1.3532
  • Sell on breakout below 1.3445, targeting 1.3405 and 1.3370

USD/JPY

  • Buy on breakout above 147.60, targeting 148.00 and 148.30
  • Sell on breakout below 147.35, targeting 147.00 and 146.70

Mean Reversion Strategy (Pullbacks):

analytics68dcc39c84173.jpg

EUR/USD

  • Sell after a failed breakout above 1.1774, looking for a return below that level
  • Buy after a failed breakout below 1.1737, on a return back above that level

analytics68dcc3a49669d.jpg

GBP/USD

  • Sell after a failed breakout above 1.3476, on a return below that level
  • Buy after a failed breakout below 1.3435, on a return back above that level

analytics68dcc3b7a674e.jpg

AUD/USD

  • Sell after a failed breakout above 0.6628, on a return below that level
  • Buy after a failed breakout below 0.6583, on a return back above that level

analytics68dcc3c111feb.jpg

USD/CAD

  • Sell after a failed breakout above 1.3939, on a return below that level
  • Buy after a failed breakout below 1.3904, on a return back above that level
The material has been provided by InstaForex Company - www.instaforex.com
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