FX.co ★ Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on January 19

Analysis of transactions in the EUR / USD pair

Trading volatility was very low yesterday, so as a result, euro bears were not able to completely take control of the market. To add to that, selling at 1.2057 should have been ignored, mainly due to the fact that the MACD line was in the oversold zone.

Trading recommendations for January 19

Italy will publish many economic reports today, such as inflation data and index of business sentiment from the ZEW Institute. If these reports indicate weaker-than-expected figures, pressure will most likely return to the euro.

Then, afterwards, a similar indicator on sentiment will be released for the eurozone, where a sharp decline in optimism may be observed. Riots are also expected to occur in the United States amid Joe Biden's inauguration on January 20. Until then, pressure on EUR / USD will remain, so short positions will be more preferable.

For long positions:

Buy the euro when the quote reaches 1.2105 (green line on the chart), and then take profit around the level of 1.2145. EUR / USD will rally only if there is good economic data from Germany.

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 1.2084 (red line on the chart), and then take profit at the level of 1.2045. There is a high chance that EUR / USD will trade downwards if the upcoming data from the EU show weak economic indicators. Then, in the afternoon, a meeting of EU finance ministers will take place, which could aggravate the euro's situation

But 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

Short positions in GBP / USD gained decent profits yesterday. At first, a signal emerged at 1.3560, however, at that time, the MACD line was in the oversold zone, which indicated the end of the downward trend. But after a while, the quote returned to this level and successfully triggered a breakdown, since at that point the MACD line went into a negative level. All in all, the downward movement was 40 pips.

Trading recommendations for January 19

The sharp pullback of quotes yesterday made it difficult to determine the further direction of the market. At the same time, tomorrow is the inauguration of Joe Biden in the United States, which could lead to another riot, which would put pressure on risky assets.

For long positions:

Buy the pound when the quote reaches 1.3618 (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 1.3583 (red line on the chart), and then take profit at the level of 1.3524. The pullback yesterday created difficulties in determining the further movement of GBP / USD.

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.