FX.co ★ Analysis and trading tips for EUR/USD on February 1

Analysis of transactions and tips for trading EUR/USD

The test of 1.0834 occurred when the MACD line was just starting to move below zero, which was a pretty good signal to sell. Accordingly, it resulted in a price decrease of around 25 pips. Shortly after, a test of 1.0805 took place, which led to a rebound of about 30 pips. No other signals appeared for the rest of the day.

GDP data from the eurozone was good, which indicates that the region had managed to avoid a recession. However, euro did not rise, ignoring also Germany and Italy's unemployment figures. Price increased only in the afternoon, when the US released a weak report on consumer confidence. The upward movement brought the market back into balance.

Today, Germany and Italy will release data on their manufacturing activity indices, followed by a report on eurozone consumer price index. The latter may affect the direction of euro and prompt a rise in quotes provided that underlying prices show a decrease. The eurozone unemployment rate will not be of much interest. More important is the Fed meeting in the afternoon, where interest rates could be raised by 0.25%. That will weaken dollar and cause a sharp rise in euro, especially since other data relating to employment and manufacturing activity will be of little interest. Dovish stance of the Fed will also return risk appetite.

For long positions:

Buy euro when the quote reaches 1.0882 (green line on the chart) and take profit at the price of 1.0910. Growth could occur if the economic data from the eurozone exceeds expectations. However, make sure that when buying, the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0852, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0882 and 1.0910.

For short positions:

Sell euro when the quote reaches 1.0852 (red line on the chart) and take profit at the price of 1.0823. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. However, make sure that when selling, the MACD line is below zero or is starting to move down from it. Euro can also be sold at 1.0882, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0852 and 1.0823.

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 decision based on the current market situation is an inherently losing strategy for an intraday trader.