06.10.202112:13 Forex Analysis & Reviews: Analysis and trading recommendations for EUR/USD and GBP/USD on October 6

Analysis of transactions in the EUR / USD pair

There was a signal to sell at 1.1586 and it coincided with the time that the MACD line was going down from zero. Sadly, it did not lead to the expected decline. Shortly after that though a signal to buy emerged, and it coincided with the time that the MACD line was at the oversold area. This led to a 20-pip increase in the pair.

Despite all that, the market remains bearish amid disappointing data from the EU. PPI for August turned out worse than expected, which then affected the European Central Bank.

But today the market promises to be calm as there is only the EU retail sales report in the morning. In the afternoon though, EUR / USD may decline amid a strong employment report from the US. Statements from FOMC member Rafael Bostic may also support dollar.

For long positions:

Open a long position when euro reaches 1.1592 (green line on the chart) and take profit at 1.1618. The pair will climb higher if data from the Euro area turns out strong, but given that political problems in the US are again coming to the fore, it is unlikely that risky assets will be in strong demand.

In any case, 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 1.1575, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1592 and 1.1618.

For short positions:

Open a short position when euro reaches 1.1575 (red line on the chart) and take profit at 1.1592. Pressure will continue in the event of weak data from the Euro area and strong statistics from the US.

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 1.1592, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1575 and 1.1552.

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.

Analysis of transactions in the GBP / USD pair

Pound bulls actively traded on Tuesday, resulting in several signals to buy in the market. However, they had to be ignored at first because the MACD line was far from zero, which limited the upside potential of the pair. It was only in the afternoon that traders were able to take long positions, as only by then did the MACD line returned to zero. It resulted in a 30-pip increase in the pair.

Talking about statistics, data on the UK services sector pushed pound up in the morning, but failed to help it consolidate above intraday highs. Then, in the afternoon, US ISM reports brought pressure back to GBP / USD.

Today, traders should pay attention to the data on the UK construction sector, as a good performance may lead to a recovery in pound. But in the afternoon, the scenario may change amid a strong employment report from the US. Growth in the indicator will certainly lead to a rise in dollar and accordingly, a sharp fall in GBP / USD. Statements from FOMC member Rafael Bostic may also support dollar.

For long positions:

Open a long position when pound reaches 1.3624 (green line on the chart) and take profit at 1.3676 (thicker green line on the chart). Good data from the UK will push the currency up.

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 1.3598, however, the MACD line should be in the oversold area, as only by that will the market reverse to 1.3624 and 1.3676.

For short positions:

Open a short position when pound reaches 1.3598 (red line on the chart) and take profit at 1.3555. Pressure will return if buyers remain inactive in the market.

But before selling, make sure that the MACD line is below zero, or is starting to move down from it. The pair could also be sold at 1.3624, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.3598 and 1.3555.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP / 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 GBP / 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.