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18.10.202109:55 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD on October 18

Analysis of transactions in the EUR / USD pair

EUR / USD went down by 15 pips on Friday, thanks to the signal to sell that coincided with the MACD line being at the overbought area. The scenario allowed traders to safely take short positions, thereby pushing the price down in the market. The, after that, the pair went up again by the same amount (15 pips) amid a signal to buy that coincided with the MACD line being at the oversold area.

Exchange Rates 18.10.2021 analysis

Better-than-expected CPI data from France and Italy led to a price increase last Friday morning. But in the afternoon the situation shifted, mainly due to a strong report on US retail sales. And most likely, this scenario will continue as there are no EU statistics scheduled to be released today. Similarly, data on US industrial production and budget execution is likely to lead a surge in market volatility and support to dollar, especially if the figures exceed expectations. Statements from FOMC members such as Randal Quarles should also follow up.

For long positions:

Open a long position when euro reaches 1.1585 (green line on the chart) and take profit at 1.1620. Price will increase only if there is a breakout at 1.1585.

But 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 1.1574, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1685 and 1.1620.

For short positions:

Open a short position when euro reaches 1.1574 (red line on the chart) and take profit at 1.1543. Pressure may return in the morning amid the lack of EU statistics. Strong data from the US may also increase demand for dollar.

But 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 1.1585, but the MACD line should be in the overbought area, as only by that will the market reverse to 1.1574 and 1.1543.

Exchange Rates 18.10.2021 analysis

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.

*La presente analisi del mercato ha un carattere esclusivamente informativo e non rappresenta una guida per l`effettuazione di una transazione.

Jakub Novak,
Esperto analitico di InstaForex
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