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FX.co ★ Analysis and trading tips for EUR/USD on January 26

Analysis and trading tips for EUR/USD on January 26

Analysis of transactions in the EUR / USD pair

A signal to sell emerged after EUR/USD hit 1.1305. Coincidentally, the MACD line was below zero, so the pair dropped more than 20 pips. But by afternoon, bulls managed to push the pair up, offsetting the earlier losses. No other signal appeared for the rest of the day.

Analysis and trading tips for EUR/USD on January 26

Latest IFO reports from Germany were mixed. On the one hand, the indicator for business climate grew, while on the other hand, the assessment of the present situation decreased. Meanwhile, the index for economic expectations rose because Covid cases are slowly dropping and countries are returning to "normal".

In terms of EUR/USD, a slight rise was observed in the afternoon because dollar demand fell after the release of weak data on US consumer confidence. And most likely, this bullish move will continue as there are no statistics to be released on the eurozone today. But in the afternoon, volatility may surge amid strong reports on US home sales. Hawkish statements from Fed Chairman Jerome Powell will also return demand for dollar, which could lead to a drop in the EUR/USD pair.

For long positions:

Buy euro when the quote reaches 1.1315 (green line on the chart) and take profit at the price of 1.1351. A rally is possible, but only in the morning because the Fed meeting will have a meeting during the US session and risky assets are unlikely to be in demand.

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 1.1295, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1315 and 1.1351.

For short positions:

Sell euro when the quote reaches 1.1295 (red line on the chart) and take profit at the price of 1.1260. Lack of bullish activity will return pressure in the market.

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 1.1315, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1295 and 1.1260.

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Analysis and trading tips for EUR/USD on January 26

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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