FX.co ★ Analysis and trading tips for EUR/USD on January 24

Analysis of transactions in the EUR / USD pair

A signal to sell emerged after EUR/USD hit 1.1342. Coincidentally, the MACD line was in the overbought area, so the pair dropped by as much as 15 pips. The same scenario happened by mid-day, but this time the market signal was to buy and the MACD line was above zero. That prompted a 16-pip increase in the pair.

The statements of ECB President Christine Lagarde were nothing new, so volatility was not observed in the market early Friday. Then, by afternoon, a better-than-expected data on EU consumer confidence was released, so EUR/USD had time to increase in price.

A lot of reports will be released today, and all of them are likely to affect market direction. In particular, strong PMI data in the Euro area will prompt an increase in demand, as growth indicates a better outlook for the economy.

In the afternoon, similar reports from the US will be published, which could return balance in the market. And most likely, traders will be cautious and focused on the Fed meeting this Wednesday, so it is better to bet on dollar rather than euro.

For long positions:

Buy euro when the quote reaches 1.1330 (green line on the chart) and take profit at the price of 1.1365. Growth will occur if economic data from the Eurozone 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 1.1314, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1330 and 1.1365.

For short positions:

Sell euro when the quote reaches 1.1314 (red line on the chart) and take profit at the price of 1.1286. Lack of bullish activity will lead to a decline in the pair.

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 1.1330, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1314 and 1.1286.

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.