October 29, 2021

How to trade EUR/USD on October 29? Simple tips for beginners. The ECB meeting provoked a storm in the foreign exchange market

 The EUR/USD pair began a strong upward movement on Thursday. The price bounced twice from the lower border of the third consecutive horizontal channel and, having settled above it, rushed further up. Thus, for today the EUR/USD pair has passed about 110 points. However, such a strong upward movement was triggered by strong macroeconomic reports and a strong foundation. Today, one of the most important GDP reports was published in the United States, and besides that, its actual value did not correspond to the forecast at all. And this almost always causes a strong market reaction. The US GDP in the third quarter turned out to be much worse than forecasted, which provoked a strong drop in the dollar. In addition, the European Central Bank today summed up the results of its two-day meeting and announced that in the fourth quarter of 2021 the rate of asset purchases will be reduced, which means, in fact, tightening monetary policy. A tightening almost always causes a strengthening of the currency. Thus, the dollar was falling today, and the euro was rising, which was reflected in the chart of the euro/dollar currency pair with such a powerful upward movement. However, in technical terms, this does not change anything for the pair so far, since it is only one day. The price has just got out of the side channel, so it has not yet reached the trend formation.

The technical picture looks just fine on the 5 minute timeframe. Today is a good example of how the pair should trade. When the movements are good, and the signals are strong, and profit is obtained from them. Let's take a look at all the trading signals of today. A sell signal was generated first when the price bounced off the level of 1.1617. After that, the price went down 18 points, which was enough to place a Stop Loss order at breakeven. It was on this order that the deal was closed, since the nearest level of 1.1576 was not reached, and it did not come to Take Profit. But already the second deal - consolidating above the 1.1617 - 1.1622 area - was profitable, as the price started a strong movement after the US and European statistics (the time of its release is marked with a tick in the chart) and continued for the rest of the day. The price crossed the 1.1666 level on the way to the level of 1.1685, so long positions should be kept open. And profit should be taken only around the level of 1.1685, since it was not possible to settle above it. As a result, the profit is about 50 points.

How to trade on Friday:

The pair left another horizontal channel on the 30-minute timeframe, but the trend has not yet come to form. Thus, it is still not very convenient to trade on the 30-minute TF, and we still do not recommend tracking signals from the MACD indicator. We advise you to wait for the formation of a trendline or trend channel. The key levels on the 5-minute timeframe for October 29 are 1.1617 - 1.1622, 1.1666, 1.1685, 1.1704. 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, the European Union will publish an important report on inflation for October, but everything will depend on how much the actual value does not correspond to the forecast (3.7% y/y). There will be no important publications and events in America tomorrow.