Analysis of transactions in the EUR / USD pair
Rumors that the Fed will change its monetary policy in the near future influenced traders to sell the euro and bet on the strengthening of the US dollar. As a result, many short positions were opened in the market yesterday, which resulted in a 60-pip decline in EUR / USD.
Trading recommendations for January 14
Although the ECB is scheduled to release a report today, it will unlikely be about a change in monetary policy. Therefore, demand for the euro is expected to continue declining today, which accordingly will result in a drop in EUR / USD. Aside from that, the US Fed will also make announcements today, and many expect that this will lead to renewed vigor for the US dollar.
For long positions:
Buy the euro when the quote reaches 1.2221 (green line on the chart), and then take profit around the level of 1.2174. EUR / USD will rally if the upcoming US data come out weaker 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 1.2135 (red line on the chart), and then take profit at the level of 1.2078. There is a high chance that EUR / USD will trade downwards if the upcoming US data indicates an improvement in the US economy. But the whole movement itself will base on whatever Jerome Powell says in his speech.
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
Two sell signals emerged for the pound yesterday. The first one is at 1.3664, which turned out to be false, as evidenced by the MACD line, which, at that time, was located in a fairly large oversold zone. Many traders ignored the deal because of it, but the repeated return to 1.3664 during the US session formed a more correct selling point for the pound, especially since the MACD line at that time began to decline from zero. All in all, the movement was about 50 pips, and during it, the quote reached the target level of 1.3611.
Trading recommendations for January 14
Data on the US economy and labor market will be published today, followed by a speech from Fed Chairman Jerome Powell. And if the Fed gives a hint on possible changes in the monetary policy, demand for the pound will surely decrease, which will lead to a fall in GBP / USD.
For long positions:
Buy the pound when the quote reaches 1.3662 (green line on the chart), and then take profit at the level of 1.3728 (thicker green line on the chart). GBP / USD will trade upwards if there is good news on COVID-19 vaccines, or if the UK government finally lifts the ongoing lockdown.
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 1.3621 (red line on the chart), and then take profit at the level of 1.3540. GBP / USD will continue to trade downwards if US data comes out better than expected.
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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