FX.co ★ Analysis and trading tips for EUR/USD on January 10

Analysis of transactions in the EUR / USD pair

EUR / USD hit 1.1316 at a time when the MACD line was far from zero, so the upside potential was limited. On its second attempt, the indicator was in the overbought area, so a signal to sell was formed. That led to a 20-pip decrease in the pair. On its third attempt, the MACD line was above zero, so there was a signal to buy in the market. That provoked a 40-pip increase in the pair.

CPI data in the Euro area led to a surge in volatility. In the afternoon, a report was released indicating a decrease in the unemployment rate in the United States, but the growth in the number of employees in the non-agricultural sector was much worse than economists' forecasts. That led to a drop in dollar, mainly because it would force the Fed to change monetary policy this year.

Employment reports from Italy and the whole eurozone will be released today, followed by data on investor confidence from Sentix. Better-than-expected figures will prompt an increase in EUR / USD, most likely towards the weekly highs. Then, in the afternoon, the US will release reports on wholesale inventories and consumer lending, but that is unlikely to affect the market. The best scenario is the pair trading horizontally.

For long positions:

Buy euro when the quote reaches 1.1342 (green line on the chart) and take profit at the price of 1.1375. Growth will occur if data on the Euro area exceeds expectations.

Before buying, make sure that the MACD line is above zero, or is starting to rise from it. It is also possible to buy at 1.1325, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1342 and 1.1375.

For short positions:

Sell euro when the quote reaches 1.1325 (red line on the chart) and take profit at the price of 1.1285. Weak data on the Euro area could prompt a decline in EUR / USD.

Before selling, make sure that the MACD line is below zero, or is starting to move down from it. Euro could also be sold at 1.1342, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1325 and 1.1285.

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.