FX.co ★ Analysis and trading tips for EUR/USD on February 2

Analysis of transactions in the EUR / USD pair

A signal to buy emerged after EUR/USD hit 1.1247. Coincidentally, the MACD line was above zero, so the pair increased by 30 pips. No other signal appeared for the rest of the day.

EUR/USD did not fall even though retail trade from Germany contracted in December. That is because PMI and employment data in the EU exceeded expectations, raising demand for euro. But in the afternoon, ISM reported good data on the US economy, provoking a correction in the pair.

Most likely, this bearish move will continue as upcoming reports from Italy and the Euro area are expected to show a slowdown, limiting growth in the pair. But in the afternoon, employment data from ADP may limit demand for dollar, prompting a rise in EUR/USD.

For long positions:

Buy euro when the quote reaches 1.1280 (green line on the chart) and take profit at the price of 1.1311. A rally will occur amid strong data on inflation. But 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 1.1260, however, the MACD line should be in the oversold area, as only by that will the market reverse to 1.1280 and 1.1311.

For short positions:

Sell euro when the quote reaches 1.1260 (red line on the chart) and take profit at the price of 1.1220. A slowdown in inflationary pressure will prompt a decline in the pair. But 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 1.1280, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1260 and 1.1220.

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.