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FX.co ★ Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on January 11

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on January 11

Analysis of transactions in the EUR / USD pair

Weak economic reports reduced demand for risky assets. As a result, the euro is starting to trade downwards in the market. To add to that, the current lockdown is affecting the outlook of the EU economy negatively, thereby limiting the upward potential in the euro. Such forces traders to close their long positions in EUR / USD.

Trading recommendations for January 11

Traders should pay attention to the report of Sentix today regarding investor confidence in the eurozone. A good data will be favorable for the euro, but is unlikely to seriously affect the balance of power.

Aside from that, the ECB president, Christine Lagarde, will deliver a speech, but it is unlikely to be about an adjustment in interest rates.

Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on January 11

For long positions:

Buy the euro when the quote reaches 1.2194 (green line on the chart), and then take profit around the level of 1.2260. A rally is a bit difficult in EUR / USD, especially since there are many factors that limit the pair's upward potential in the market.

Anyhow, keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.

For short positions:

Sell the euro after the quote reaches 1.2157 (red line on the chart), and then take profit at the level of 1.2103. There is a high chance that EUR / USD will decline in the market, since the EU economy was not able to demonstrate good growth rates in the 4th quarter of 2020.

But of course, before selling, it is important to make sure that the MACD line is below zero and is starting to move down from it.

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.

Analysis of transactions in the GBP / USD pair

Demand for the pound continues to decrease because of a number of factors. One example is the tough quarantine measures implemented in the UK, while the other is the possible disruption in the supply chains due to the new Brexit agreement. However, the upward potential in GBP / USD remains, therefore, there is still a chance that the pair will rise in the markets.

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Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on January 11

Trading recommendations for January 11

GBP/USD is expected to continue trading downwards today, especially since there are no important economic reports scheduled to be published. In that regard, reaching a price below 1.3525 could intensify the fall in the short term, therefore, it is best to short the pound today.

For long positions:

Buy the pound when the quote reaches 1.3526 (green line on the chart), and then take profit at the level of 1.3597 (thicker green line on the chart). GBP/USD may start trading upwards if news emerge that a vaccine has been developed against the new strain of coronavirus.

But keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.

For short positions:

Sell the pound after the quote reaches 1.3492 (red line on the chart), and then take profit at the level of 1.3435. GBP/USD will continue to trade downwards if news emerge that supply chains are disrupted because of the new Brexit trade deal.

Keep in mind that before selling, make sure that the MACD line is below zero and is starting to move down from it.

What's on the chart:

The thin green line is the key level at which you can place long positions in the GBP/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 GBP/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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