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Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on September 23
time 23.09.2022 08:47 AM
time Relevance up to, 24.09.2022 08:47 AM

Analysis of transactions in the EUR / USD pair

Euro was unable to cling around 0.9900 so it quickly returned to yearly lows. The reason was the US jobless claims report yesterday, which reminded traders of why they bet on dollar in the current environment. For this, too high inflation is to blame as it forces the Federal Reserve to act more aggressively.

A number of reports are due out today, such as the index of business activity in the manufacturing sector, the service sector and composite index of Eurozone countries. All of them do not carry anything good, so it is likely that a new wave of sell-offs will be seen in euro, which will push it beyond yearly lows. Similar data from the US will be released in the afternoon, but there the indices may surprise traders. This could lead to another rise in dollar, especially if Fed Chairman Jerome Powell talks about further rate hikes in his speech.

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For long positions:

Buy euro when the quote reaches 0.9845 (green line on the chart) and take profit at the price of 0.9897. However, growth is unlikely especially if the Euro area reports weak economic statistics.

Take note that when buying, the MACD line should be above zero or is starting to rise from it. Euro can also be bought at 0.9816, but the MACD line should be in the oversold area as only by that will the market reverse to 0.9845 and 0.9897.

For short positions:

Sell euro when the quote reaches 0.9816 (red line on the chart) and take profit at the price of 0.9771. Pressure will return amid a bad data in the US and continued hawkish policy by the Fed.

Take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can be sold at 0.9845, but the MACD line should be in the overbought area as only by that will the market reverse to 0.9816 and 0.9771.

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 decision based on the current market situation is an inherently losing strategy for an intraday trader.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2022
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