16.01.202606:59 Forex Analysis & Reviews: How to trade the EUR/USD currency pair on January 16? Simple tips and trade review for beginners

Trade review of Thursday:

1H chart of the EUR/USD pair

The EUR/USD currency pair continues to please with its stability of movement. However, that is the only thing it currently pleases with. Volatility remains low, and movement is purely technical. Recall that on the daily TF, a flat has been forming in the 1.1400–1.1830 range for the seventh month in a row, and that is the reference we should use at the moment. Since the price bounced off the upper line of the sideways channel, a quite logical move toward the lower line began, which has nothing to do with the macroeconomic or fundamental background. Proof of this (once again) is yesterday. In the morning, the EU released one neutral report (Germany's GDP for 2025) and one positive report (EU industrial production for November). But these reports did not trigger even a minimal rise in the euro. In the second half of the day, the US dollar began to strengthen, which could have been called logical in light of the US initial jobless claims and Philadelphia business activity reports — if not for one "but": the dollar's rise began several hours before those reports were released and ended when the reports were published.

5M chart of the EUR/USD pair

On the 5-minute TF on Thursday, no trading signals formed, but the day before, the price bounced from the 1.1655–1.1666 area, which allowed novice traders to open shorts. Since volatility is low at the moment, trades have to be carried over to the next day so targets can be worked out.

How to trade on Friday:

On the hourly timeframe, the downtrend continues, as evidenced by the trendline. It was not possible to overcome the 1.1800–1.1830 area, which is the upper boundary of the daily TF flat. The technical decline is logical and may continue down to 1.1400. The overall fundamental and macro background remains very weak for the US dollar, but the daily TF flat plays take priority, and traders practically pay no attention to the macro background.

On Friday, novice traders can trade again from the 1.1584–1.1591 area. A bounce from this area will allow opening long positions targeting 1.1655–1.1666, and the weakness of movements forces traders to keep trades open for several days. A close below this area will make shorts relevant with a target of 1.1550.

On the 5-minute TF, consider the levels 1.1354–1.1363, 1.1413, 1.1455–1.1474, 1.1527–1.1531, 1.1550, 1.1584–1.1591, 1.1655–1.1666, 1.1745–1.1754, 1.1808, 1.1851, 1.1908, 1.1970–1.1988. Today, the EU will publish Germany's second-estimate inflation for December, and the US will publish industrial production for December. Neither report is important, and in any case, the market is ignoring much of the incoming information.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate many false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should ideally be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered as a support or resistance area.
7. After the price moves 15 pips in the correct direction, place a stop loss at breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.