Analysis of transactions in the EUR / USD pair
A good sell signal emerged for the euro at 1.2131, which was also supported by the MACD line, since at that time, the indicator had just moved into the negative zone. So, as a result, EUR / USD moved down by about 30 pips, however, the pair did not reach the target level. To add to that, pressure on the euro is expected to continue this week, especially since no good news from the EU is anticipated.
Trading recommendations for January 18
Italy will publish an economic report today, however, it is unlikely to have a significant impact on the market, therefore, after a short pause in movement, EUR / USD is expected to continue dropping towards much lower price levels. To add to that, traders will prefer safer assets, given that riots are expected in the US amid Joe Biden’s inauguration on January 20. Until then, the pressure on the euro will continue and short positions are more preferable.
For long positions:
Buy the euro when the quote reaches 1.2095 (green line on the chart), and then take profit around the level of 1.2161. EUR / USD will rally only if the quote breaks above 1.2095, and if there is good news regarding the COVID-19 situation in the EU.
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 1.2057 (red line on the chart), and then take profit at the level of 1.2001. There is a high chance that EUR / USD will trade downwards if the upcoming data from Italy shows weak economic indicators. However, the whole movement 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
GBP / USD showed a good downward movement on Friday, which gave quite a lot of profit to pound sellers. In particular, shorts opened at 1.3654 pulled the quote down towards 1.3590, thereby granting more than 50 pips of profit to the bears. Meanwhile, several attempts to raise the price occurred, but all of them failed.
Trading recommendations for January 18
Pressure on the pound returned this week, mainly because the outlook for the UK economy has dimmed amid current events in the country. For instance, authorities say complete vaccination will finish only by September of this year, therefore, only in the summer period can one expect a brighter economic growth.
Aside from that, Joe Biden is scheduled to be inaugurated this January 20, therefore, it is best to bet on a further decline in GBP / USD, as the event could lead to another riot in the US.
For long positions:
Buy the pound when the quote reaches 1.3592 (green line on the chart), and then take profit at the level of 1.3691 (thicker green line on the chart). GBP / USD will only 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 1.3560 (red line on the chart), and then take profit at the level of 1.3501. GBP / USD is expected to continue trading downwards this week, especially since demand for the US dollar will surely increase amid Joe Biden’s inauguration this January 20.
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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