FX.co ★ Analysis and trading tips for EUR/USD on January 18

Analysis of transactions in the EUR / USD pair

EUR/USD hit 1.1412 at a time when the MACD line was moving below zero. That prompted a signal to sell in the market, which led to a 20-pip decrease in the pair. No other signal appeared for the rest of the day.

Euro rose early Monday because of the strong CPI in Italy and the recent Eurogroup meeting. But by afternoon, pressure returned in the market, as the celebration of Martin Luther King Day affected the volume of trading in the US. That allowed sellers to continue the bearish trend in EUR/USD.

Today, Germany and the whole Euro area will release data on business sentiment, which may lead to a rally in the pair. Then, in the US session, a slight surge in volatility may be observed amid reports on the manufacturing sector and the housing market. Serious changes may occur, so be careful when selling at lows.

For long positions:

Buy euro when the quote reaches 1.1410 (green line on the chart) and take profit at the price of 1.1448. Growth will occur if reports from the Euro area exceed 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 1.1380, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1410 and 1.1448.

For short positions:

Sell euro when the quote reaches 1.1380 (red line on the chart) and take profit at the price of 1.1340. EUR/USD will decline if economic data from Germany and the euro area are lower than expected.

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 1.1410, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1380 and 1.1340.

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.