Analysis of transactions in the EUR / USD pair
Weak inflation report pulled demand for the euro down yesterday. As a result, a sell signal appeared at 1.2130, which led to a downward movement of about 30 pips. However, if we look more closely at the signal, we will notice that the MACD line is in the oversold zone, which significantly affects the downward potential of the pair. Therefore, it would be best to ignore this signal and not short EUR / USD yet, as the bearish move yesterday was just pure luck.
Trading recommendations for January 21
Joe Biden was inaugurated yesterday, which led to strong pressure on the US dollar and accordingly, the strengthening of the euro. Today, this bullish momentum could continue if the ECB decided to keep interest rates unchanged for the EU. Weak US employment reports could also put more pressure on the dollar.
For long positions:
Buy the euro when the quote reaches 1.2142 (green line on the chart), and then take profit around the level of 1.2198. EUR / USD will rally if the ECB announces a more active pace of economic recovery.
But keep in mind that before buying, the MACD line should be above zero and is starting to rise from it.
For short positions:
Sell the euro after the quote reaches 1.2120 (red line on the chart), and then take profit at the level of 1.2080. EUR / USD will trade downwards only if the upcoming ECB forecasts are negative, and if the data on the US labor market are much better than expected.
Of course, before selling, it is important to make sure that the MACD line is below zero and is starting to move down from it.
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
Higher-than-expected data on UK inflation led to a rally in GBP / USD yesterday, as a result of which a good buy signal appeared in the market. To add to that, the MACD line was in a positive zone at that time, further supporting the bullish idea. The target level was 1.3714, but the upward movement ended at 1.3708. Nevertheless, it gave profit of about 30 pips.
Trading recommendations for January 21
Joe Biden’s inauguration did not make an impression to pound sellers who were actively pushing the pound down yesterday. But today, there is a high chance that GBP / USD will grow, especially amid weak data on the US labor market. In fact, price may move towards new yearly highs today.
For long positions:
Buy the pound when the quote reaches 1.3694 (green line on the chart), and then take profit at the level of 1.3754 (thicker green line on the chart). However, do this only if other indicators confirm a bullish signal. For example, the fifth test of the 37th figure could trigger a major rally in GBP / USD.
But keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.
For short positions:
Sell the pound after the quote reaches 1.3665 (red line on the chart), and then take profit at the level of 1.3608. However, it is best to avoid shorting the pound since a bull market is clearly forming.
Nonetheless, keep in mind that before selling, make sure that the MACD line is below zero and is starting to move down from it.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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