Analysis of previous deals:
30M chart of the EUR/USD pair
The EUR/USD pair as a whole continued its downward movement on Thursday. However, it was already doing this with less activity than the day before. But no one said that now the pair will go through 80 points every day. Let us remind you that in the last few months it has been going just 40 points a day in most cases. However, the downward trend persists as the downtrend line remains relevant. We already mentioned that it is quite formal, since it does not have clear and precise points of support. Nevertheless, it works, so today it was possible to consider sell signals from the MACD indicator. Unfortunately, not a single signal was generated during the day, so there was nothing to work out on this timeframe. It should also be noted that there were several more or less important macroeconomic publications on Thursday. For example, the unemployment rate in the European Union was published at lunchtime, and a report on GDP for the second quarter was released at the beginning of the US trading session. These two events are marked with check marks in the chart. As novice traders can see, there was practically no market reaction to these events. But in the late afternoon the euro resumed to fall, which could have been provoked by the speeches of Jerome Powell and Janet Yellen. True, a new rise in the dollar began about an hour later, after the time when both were supposed to start speaking. But, if we assume that their speeches have shifted slightly in time, then the downward movement may be a consequence of these events.
5M chart of the EUR/USD pair
The technical picture on the 5-minute timeframe on Thursday was not ideal, but nevertheless it allowed novice traders to make some money. By and large, only one signal was generated during the day - to sell. And it was formed practically throughout the entire European session - it was so fuzzy. Therefore, everything was at the discretion of novice traders. Recall that, ideally, a good signal is a point and fast rebound of the price from the level or the same fast breakthrough of the level. When the price circles around the level for several hours, this is an inaccurate signal, however, we do not prohibit such rejection, but in the case of such signals, one should look at the general picture of the state of affairs. Today it was possible to work out a sell signal, as the pair was likely to continue falling. However, there was not a single level below the level of 1.1603 that could serve as a guideline for movement. Therefore, it was possible to count only on Take Profit. As a result, it worked, since the price managed to go down the required 30 points with low volatility.
How to trade on Friday:
The EUR/USD pair pair has formed a new downward trend and continues to adhere to it on the 30-minute timeframe. Unlike the pound, the fall in the European currency is very difficult to explain from a fundamental perspective. However, there is movement, so it should be practiced. At this time, we advise you to consider sell signals from the MACD indicator, but we remind you that they should be formed as close to the zero level as possible. The key levels on the 5-minute timeframe for October 1 are 1.1496, 1.1571, 1.1603, 1.1666. Take Profit, as before, is set at a distance of 30-40 points. Stop Loss - to breakeven when the price passes in the right direction by 15 points. At the 5M TF, the target can be the nearest level if it is not too close or too far away. If it is, then you should act according to the situation or work according to Take Profit. On Friday, we advise you to pay attention to the ISM manufacturing index in the US and to the report on inflation in the European Union. From our point of view, these are the two reports that have a chance to be worked out by the markets.
What's on the charts:
Support and Resistance Price Levels - Levels that are targets when buying or selling. You can place Take Profit levels near them.
Red lines - channels or trend lines that display the current trend and show which direction it is preferable to trade now.
MACD indicator (14,22,3) - a histogram and a signal line, the crossing of which is a signal to enter the market. It is recommended to use in combination with trend plots (channels, trend lines).
Important speeches and reports (always contained in the news calendar) can greatly influence the movement of a currency pair. Therefore, during their exit, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.
Beginners in the Forex market should remember that every trade cannot be profitable. The development of a clear strategy and money management are the key to success in trading over a long period of time.
The material has been provided by InstaForex Company - www.instaforex.com