01.02.202109:27 Forex Analysis & Reviews: Analysis and trading recommendations for the EUR/USD and GBP/USD pairs on February 1

Analysis of transactions in the EUR / USD pair

Good data on the German economy supported the euro. However, the buy signals that appeared in the market had to be ignored since the MACD line, during those times, were in the overbought zone.

Trading recommendations for February 1

The bullish mood may continue today if the EU publishes strong Manufacturing PMI for the bloc. In fact, this indicator is the one pulling the entire EU economy up, since the service sector has already shrunk since November last year. Latest data on business activity and unemployment will also be released during the European session.

In the afternoon, a report from ISM will also be published, and it may lead to a surge in volatility in favor of the US dollar. Many expect that the reports will be quite good.

For long positions:

Buy the euro when the quote reaches 1.2137 (green line on the chart), and then take profit around the level of 1.2164. EUR / USD will rally if there is good economic data from the EU.

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

For short positions:

Sell the euro after the quote reaches 1.2123 (red line on the chart), and then take profit at the level of 1.2089. EUR / USD will trade downwards if there is bad economic data from the EU.

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

Two signals appeared in GBP / USD on Friday. However, both of them had to be ignored since they were false. The first one is to sell at 1.3693, but the MACD line at that time was close to the oversold zone. Meanwhile, the second is to buy at 1.3716, but by that time, the MACD line was already in the overbought area.

Trading recommendations for February 1

Manufacturing PMI for the UK will be released today, and a good performance is likely to lead to a breakout of yearly highs, as well as a larger rally in GBP / USD. However, be very careful when trading at the highs to avoid falling into the bear trap. The MACD line will help determine if trading signals are false, so watch out for it.

For long positions:

Buy the pound when the quote reaches 1.3744 (green line on the chart), and then take profit at the level of 1.3786 (thicker green line on the chart). GBP / USD will climb higher if the quote breaks out of the yearly highs.

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 1.3720 (red line on the chart), and then take profit at the level of 1.3658. GBP / USD will trade downwards if there is weak economic data from the UK.

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.