31.01.202308:36 Forex Analysis & Reviews: Analysis and trading tips for EUR/USD on January 31

Analysis of transactions and tips for trading EUR/USD

The test of 1.0885 occurred when the MACD line was just starting to move above zero, which was a pretty good signal to buy. Accordingly, it resulted in a price increase of around 25 pips. No other signals appeared for the rest of the day.

Lower-than-expected Q4 GDP data from Germany led to a sell-off in EUR/USD on Monday afternoon. Most likely, this momentum will continue today as GDP data for the whole Euro area, as well as Germany and Italy's unemployment figures, are expected to show decreases. Meanwhile, price indices from Germany and France are unlikely to affect the pair's direction.

In the afternoon, the US will release a report on consumer confidence, which, if shows an increase, could prompt another decline in EUR/USD. The Chicago PMI report, on the other hand, will be of little interest to the market.

For long positions:

Buy euro when the quote reaches 1.0860 (green line on the chart) and take profit at the price of 1.0895. 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 1.0834, but the MACD line should be in the oversold area as only by that will the market reverse to 1.0860 and 1.0895.

For short positions:

Sell euro when the quote reaches 1.0834 (red line on the chart) and take profit at the price of 1.0805. Pressure will increase if economic reports from the Euro area turn out to be weaker than expected. Slowing inflationary pressures in Germany and Italy could also prompt a price decrease. 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 1.0860, but the MACD line should be in the overbought area as only by that will the market reverse to 1.0834 and 1.0805.

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.