Analytics and trading signals for beginners. How to trade EUR/USD on October 6? Plan for opening and closing trades on Tuesday

Hourly chart of the EUR/USD pair

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The EUR/USD pair managed to slightly retreat last Monday night but almost immediately went back to moving up. Therefore, it turns out that there was no normal correction, and the MACD indicator failed to discharge. We said last night that in order to open new long positions, it is necessary for the MACD indicator to ease to zero. Now novice traders can observe what can happen if the MACD indicator does not have time to discharge: the price went back to moving up and the indicator continues to decline. Thus, in this situation there is only one way out, to wait for a new round of corrective movement to the upward trend line, and then - for a new buy signal to appear. Novice traders who wish to sell the pair should wait until we have gone beyond the trendline, which was recently rebuilt and currently supports the upward trend again.

The fundamental background for the dollar remains rather difficult. Meanwhile, it is rather neutral for the euro. Some macroeconomic indicators from the European Union leave much to be desired (especially inflation), and there have also been problems recently with the distribution of the Economic Recovery Fund worth 750 billion euros, which was formed a couple of months ago. However, we do not believe that these are such serious problems for the eurozone and the euro. In the end, European officials will figure out how to distribute money between the EU countries, especially since this program will only start working in 2021. But, in our humble opinion. everything remains much worse and more complicated in the US. First, as we have already mentioned, US President Donald Trump's diagnosis, which only adds uncertainty to the future of the US economy and the country itself. Secondly, the American economy contracted in the second quarter by much more than the European one. Thirdly, the second wave of COVID-2019 began only a couple of weeks ago in the European Union, and even then not in all countries, but the first wave has not even ended yet in the United States. And of course, the upcoming elections, which only adds uncertainty. Therefore, no one is talking about long-term buy positions on the dollar, the greenback can only count on short periods of strengthening, and even then corrective ones. Federal Reserve Chairman Jerome Powell and European Central Bank President Christine Lagarde will both deliver speeches today. Perhaps both the top economists and bankers of the US and the EU will disclose something important. It will depend on how traders react or whether they would react at all.

Possible scenarios for October 6:

1) Buy positions on the EUR/USD pair remain relevant at the moment, since we rebuilt the upward trend line, and the price also failed to gain a foothold below the 1.1696 level. Thus, we recommend novice traders to trade up with targets at the resistance levels 1.1819 and 1.1854. But in order to open new buy orders, we recommend waiting for the correction and a new signal from MACD.

2) Sell positions may become relevant again if the pair settles below the trend line. Depending on when this consolidation occurs, it may also need to overcome the 1.1696 level, which was the lower border of the horizontal channel for a long time, and did not let the pair down on September 30 and October 2. Take note that the dollar is reluctant to rise in price, and the fundamental background is not in its favor.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (10,20,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

Beginners on Forex should remember that not every single trade has to 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