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29.10.202408:02 Forex Analysis & Reviews: How to Trade the EUR/USD Pair on October 29? Simple Tips and Trade Analysis for Beginners

Monday's Trade Analysis:

1H Chart of EUR/USD Pair

Exchange Rates 29.10.2024 analysis

On Monday, the EUR/USD currency pair moved more sideways than up or down. With no macroeconomic or fundamental news, the low volatility was to be expected. The first U.S. labor market data will be released today, so an increase in volatility can be anticipated. The price barely broke through the trendline, suggesting a possible rise in the euro. However, given the significant amount of important reports from the EU and the U.S. this week, the dollar could quickly resume its growth, pushing the pair downward. Therefore, macroeconomic releases should be prioritized over technical signals. A correction may be approaching, but this doesn't mean it must happen immediately without alternatives.

5M Chart of EUR/USD Pair

Exchange Rates 29.10.2024 analysis

In the 5-minute time frame, one buy signal was formed on Monday when the price surpassed the 1.0797-1.0804 area. However, due to very low volatility, it wasn't profitable. Nevertheless, the price did not fall below this area, so holding long positions is still feasible.

How to Trade on Tuesday:

In the hourly time frame, EUR/USD could start a correction after a month-long decline. There are at least some reasons for a potential rise in the euro. We believe the pair may begin an upward correction, though it's unlikely to be strong without supportive news. In the medium term, we still expect a downward trend.

For Tuesday, novice traders may trade from the 1.0797-1.0804 area again. If the price consolidates below it, this could be a good opportunity for new sales. Otherwise, holding yesterday's buy positions is still an option.

In the 5-minute time frame, focus on the levels 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0845-1.0851, 1.0888-1.0896, 1.0940-1.0951, 1.1011, 1.1048, 1.1091, and 1.1132-1.1140. No significant events are scheduled for the EU on Tuesday, but in the U.S., the JOLTs report on job openings will be released. While it's not the most significant labor market report, it still holds considerable importance.

Basic Trading System Rules:

  1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
  2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
  3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
  4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
  5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
  6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
  7. After the price moves 15 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2024
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