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04.11.2022 08:34 AM
Analysis and trading tips for EUR/USD on November 4

Analysis of transactions in the EUR / USD pair

The test of 0.9807 occurred at the time when the MACD line went down a lot from zero, which should have limited the downside potential of the pair. However, the pair continued to fall, eventually testing 0.9753. Long positions surged in this area, but the quote did not bounce up.

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Unemployment statistics in the Euro area, as well as the speech of ECB President Christine Lagarde, did not help euro maintain a firm position. It was only in the afternoon, after a weak report on business activity in the US services sector, did the currency see a slight upward correction.

Today, during the European session, there will be reports on business activity in Germany, France, Italy and the eurozone. The producer price index will also be released, but it will be of little interest. ECB members Christine Lagarde and Joachim Nagel will give speeches, which could affect markets. In the afternoon, very important reports on the US labor market will come out, namely the unemployment rate and the change in the number of people employed in the non-farm sector. Weak data will return risk appetite, which will hit the position of dollar. But if the data turns out to be better than forecasts, another sell-off will be seen in EUR/USD.

For long positions:

Buy euro when the quote reaches 0.9805 (green line on the chart) and take profit at the price of 0.9868. Growth will occur if data from the Euro area exceed expectations. But 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 0.9772, however, the MACD line should be in the oversold area as only by that will the market reverse to 0.9805 and 0.9868.

For short positions:

Sell euro when the quote reaches 0.9772 (red line on the chart) and take profit at the price of 0.9712. Pressure will return if the US reports strong labor market data. But take note that when selling, the MACD line should be below zero or is starting to move down from it.

Euro can also be sold at 0.9805, however, the MACD line should be in the overbought area as only by that will the market reverse to 0.9772 and 0.9712.

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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,
Especialista em análise na InstaForex
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