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19.01.2023 10:31 AM
Analysis and trading tips for EUR/USD on January 19

Analysis of transactions and tips for trading EUR/USD

Euro tested 1.0815 when the MACD line was far from zero, so the upside potential was limited. Sometime later, it tested 1.0861, but this time the market signal was to sell, which resulted in a price decrease of as much as 50 pips. No other signals appeared for the rest of the day.

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Euro did not move much on Wednesday morning because the December data for the Eurozone's consumer price index was in line forecasts. However, by afternoon, there was a rise to January highs as the US retail trade report came out worse than expected.

Today, ECB President Christine Lagarde will make a speech, which should discuss yesterday's inflation data and the possible direction of the monetary policy. This could be decisive for the dynamics of EUR/USD. The ECB's current account balance data is unlikely to have much impact on the market.

US housing market statistics and initial jobless claims are due out later in the afternoon, in which a decline in numbers will weaken dollar demand. Manufacturing index data from the Philadelphia Fed could offset this decline.

For long positions:

Buy euro when the quote reaches 1.0807 (green line on the chart) and take profit at the price of 1.0861. Growth will occur if Eurozone statistics exceed expectations. However, before buying, make sure that the MACD line is above zero or is starting to rise from it. Euro can also be bought at 1.0781, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0807 and 1.0861.

For short positions:

Sell euro when the quote reaches 1.0781 (red line on the chart) and take profit at the price of 1.0730. Pressure will return if the upcoming reports are weaker than expected and if the attempt to consolidate above 1.0810 fails. But take note that when selling, the MACD line should be below zero or is starting to move down from it. Euro can also be sold at 1.0807, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.0781 and 1.0730.

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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.

Jakub Novak,
Especialista em análise na InstaForex
© 2007-2023
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