Relevance up to 06:00 2022-01-18 UTC+00
Analysis of transactions in the EUR / USD pair
EUR/USD hit 1.1464 at a time when the MACD line was moving below zero. That prompted a signal to sell in the market, but did not result in a sharp decrease as expected. In the afternoon, the same situation emerged, and this time the pair dropped by more than 50 pips.
Euro rose early Friday because GDP data from Germany exceeded expectations. Then, by afternoon, there was a decline in EUR/USD as statements from ECB President Christine Lagarde were the same as before. Dollar demand also grew despite weak reports on US industrial production and retail trade. Apparently, Fed members made it clear that they are ready to act more aggressively in terms of monetary policy.
Today, Italy will release data on consumer prices, followed by a meeting of the Eurogroup.
But those have little chance to affect the market, so trading will remain half in the morning. In the US session, trading volume will be low due to the celebration of Martin Luther King Day. Most likely, the bears will attempt to push through Friday’s lows, so it is best to take short positions in the pair.
For long positions:
Buy euro when the quote reaches 1.1437 (green line on the chart) and take profit at the price of 1.1542. 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 1.1412, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1437 and 1.1472.
For short positions:
Sell euro when the quote reaches 1.1412 (red line on the chart) and take profit at the price of 1.1375. EUR/USD will decline if economic data from Italy are lower than expected. The results of the upcoming Eurogroup meeting could also bring pressure on 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 1.1437, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1412 and 1.1375.
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.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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