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FX.co ★ Analytics and trading signals for beginners. How to trade EUR/USD on October 1? Plan for opening and closing trades on Thursday

Analytics and trading signals for beginners. How to trade EUR/USD on October 1? Plan for opening and closing trades on Thursday

Hourly chart of the EUR/USD pair

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The EUR/USD pair went back to moving up last Wednesday night, although the growth was not very strong. Nevertheless, a second round of correction did not happen, as we expected. However, the previous local high of 1.1755 has not been overcome either. Therefore, we are still leaning towards the option that the pair will begin to correct again. Yesterday's round of correction still made it possible for us to form an upward trend line, which supports bull traders. However, almost any new round of corrective movement can end when the price settles below this line. And so the technical picture for the euro/dollar pair remains rather complicated at this time. Novice traders are advised to exercise caution when opening any positions.

The fundamental backdrop for the US currency remains complex. Several macroeconomic reports were published yesterday, but none of them caused an immediate reaction from traders. Approximately the same picture can be observed today. The problem is that from the very beginning of the pandemic, market participants, in principle, stopped paying attention to macroeconomic data, and epidemiological indicators and the general fundamental background were prioritized instead. For example, everything has been relatively calm in the European Union in recent months, in contrast to the United States. In Europe, they adopted the Economic Recovery Fund worth 750 billion euros, and the second wave of the coronavirus pandemic began only now, and even then, not in all EU countries. High incidence rates of the COVID-2019 virus remain in America all this time, the country was engulfed in massive riots and racially motivated protests for several months, the economy contracted three times more than the European one, and at the same time an outright political crisis was brewing. And what exactly is the political factor, many experts consider that as one of the main reasons for the US dollar's decline in recent months. The problem is that many traders and investors are trite to fear a future with Donald Trump as the head of the country. The results of his four years of work can be assessed as negative. However, as in 2016, Trump may win the election, although, according to all forecasts, he should not. That is why most major players prefer to wait for the November 3 elections, find out their results, and only after that, perhaps, buy the US dollar and invest in the economy of this country. But it is corny, many now simply do not want to risk buying the dollar, that's all. Therefore, we believe that this situation will continue until the elections themselves.

Possible scenarios for October 1:

1) Since traders managed to overcome the upper line of the descending channel and a new ascending trend line has appeared, now, quite unexpectedly, long positions on the euro currency have become relevant. However, as we have said more than once, the pair needs to correct. Therefore, we recommend that you be extremely careful when opening any long deals. There have been no new signals from MACD in the past few hours, nor are they expected in the next few hours. Thus, this factor also speaks in favor of the fact that one should not rush to open new deals.

2) Sell positions have lost their relevance after breaking the integrity of the descending channel. The technical picture speaks in favor of the option of continuing the upward movement. Thus, in order to consider selling options, the price should settle below the upward trend line. But even in this case, such a signal may be false, since a downward movement may be a commonplace correction. In general, the situation is currently difficult for novice traders.

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 market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade
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