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16.10.202518:00 Forex Analysis & Reviews: EUR/USD: Tips for Beginner Traders on October 16th (U.S. Session)

Trade Analysis and Recommendations for the Euro

The price test at 1.1653 occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For that reason, I did not sell the euro. The second test of 1.1653 coincided with the MACD being in the oversold zone, which triggered Scenario #2 (buy setup) and led to a 14-point increase in the pair.

Eurostat's data for August show a trade surplus in the eurozone of €9.7 billion, which significantly exceeded analysts' expectations of around €6.9 billion. The improvement in the trade balance is due to rising exports of goods and services from the euro area, combined with restrained import growth. Exports of machinery, chemical products, and food increased noticeably. This was supported by easing trade tensions with the U.S. and the global economic recovery.

In the second half of the day, data will be released on the Philadelphia Fed Manufacturing Index, and FOMC members Christopher Waller and Michael Barr are scheduled to speak publicly. These events provide an important set of information for investors and traders seeking to assess the current health of the U.S. economy and forecast the direction of monetary policy. The Philadelphia Fed Manufacturing Index serves as a leading indicator of the industrial sector in an important U.S. region. Its value can reflect nationwide trends in manufacturing, including new orders, employment levels, and overall business sentiment.

Close attention will be paid to the speeches by Christopher Waller and Michael Barr, members of the Federal Open Market Committee (FOMC). Their remarks on the macroeconomic situation, inflation, and interest rate forecasts could significantly influence market expectations. Investors will closely analyze their statements for any hints of further interest rate cuts, which could weaken the dollar even more.

As for intraday strategy, I will rely mainly on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, it is possible to buy the euro when the price reaches around 1.1666 (green line on the chart), targeting growth to 1.1705. At 1.1705, I plan to exit the market and open a sell position in the opposite direction, aiming for a 30–35 point retracement from the entry point. Expecting euro growth today is reasonable only if Fed representatives adopt a dovish stance.

Important: Before buying, make sure that the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the euro if there are two consecutive tests of the 1.1650 price level while the MACD is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Growth toward 1.1666 and 1.1705 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after it reaches the 1.1650 level (red line on the chart). The target will be 1.1615, where I intend to exit and buy in the opposite direction, aiming for a 20–25 point retracement from the level. Downward pressure on the pair is unlikely to return today.

Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of the 1.1666 level while the MACD is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward 1.1650 and 1.1615 can be expected.

Chart Legend

• Thin green line – Entry price for buying the instrument
• Thick green line – Suggested level for placing Take Profit or manually fixing profits, as further growth above this level is unlikely
• Thin red line – Entry price for selling the instrument
• Thick red line – Suggested level for Take Profit or manual profit-taking, as further decline below this level is unlikely
• MACD indicator – When entering the market, use overbought/oversold zones as a guide

Important Note for Beginners

Forex beginners should be very cautious when making entry decisions. Before major fundamental reports are released, it's best to stay out of the market to avoid sharp price swings. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

And remember: for successful trading, you need a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

*تعینات کیا مراد ہے مارکیٹ کے تجزیات یہاں ارسال کیے جاتے ہیں جس کا مقصد آپ کی بیداری بڑھانا ہے، لیکن تجارت کرنے کے لئے ہدایات دینا نہیں.

Jakub Novak,
Analytical expert of InstaSpot
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