Analysis of transactions in the EUR / USD pair
Latest economic reports put pressure on the euro last Friday, preventing the development of the upward trend that had formed in the middle of the week. In any case, no one was in a hurry to buy the US dollar, even despite the fact that similar reports on the US economy turned out to be much better than expected. So, on Friday, although more than 4 signals emerged for EUR / USD (both to buy and sell), all of them were ignored, especially since every time that they were formed, the MACD line was either in the overbought zone or in the oversold zone.
Trading recommendations for January 25
The ECB is scheduled to hold a press conference today, however, it is unlikely to be about any change in the monetary policy.
At the same time, there will be reports from the IFO Institute on the indicator for assessing the current situation, the good performance of which is likely to resume the upward trend in EUR / USD. Therefore, it would be best to continue trading long positions in the market, especially after a breakout at 1.2185.
EUR / USD did not rally yesterday because the ECB announced an expected double recession for the EU economy. Aside from that, the latest report for the US labor market was better than expected, so the dollar did not decline much in the market.
Meanwhile, a number of economic reports are scheduled to come out today, which may lead to the growth of the euro, provided that the data turn out to be better than projected. Similar data will also be published for the US economy.
For long positions:
Buy the euro when the quote reaches 1.2185 (green line on the chart), and then take profit around the level of 1.2214. EUR / USD will rally if the upcoming economic data comes out better than expected.
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 1.2165 (red line on the chart), and then take profit at the level of 1.2130. EUR / USD will trade downwards if the upcoming economic data comes out weaker than expected, and if ECB president Christine Lagarde announces a negative outlook for the EU economy.
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
Weak economic data from the UK led to a sharp drop in GBP / USD. As a result, short positions may be opened at 1.3687, but if you look at the chart and at the MACD line, it is in the oversold zone, which suggests that this sell signal should be ignored.
Trading recommendations for January 25
Demand for the pound is expected to remain quite high, which will lead to the continuation of the upward trend. Therefore, the best option is to continue opening long positions in GBP / USD.
For long positions:
Buy the pound when the quote reaches 1.3714 (green line on the chart), and then take profit at the level of 1.3754 (thicker green line on the chart). GBP / USD will trade even higher if the quote breaks above the yearly highs.
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 1.3687 (red line on the chart), and then take profit at the level of 1.3628.
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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