12.01.202209:53 Forex-elemzések és áttekintések: Analysis and trading tips for EUR/USD on January 12

Analysis of transactions in the EUR / USD pair

EUR / USD hit 1.1348 at a time when the MACD line was far from zero. That limited the upside potential of the pair, so traders could not take long positions as it may lead to losses. Some time after, the pair reached the level for the second time. However, the market signal was to sell, so the quote dropped by 20 pips. The same signal appeared towards the middle of the day, when the pair moved to 1.1335. But that did not lead to a decline even if the MACD line was going down from zero. There was also no increase during the second test of the level. And when the quote hit 1.1348 during the US session, the indicator was far from zero, so there was no movement.

Retail sales in Italy did not affect the rate of EUR/USD, but the statements of ECB President Christine Lagarde did. It eased the pressure on the pair, which allowed buyers to maintain their position in the market. It rose further in the afternoon as the speech of Fed Chairman Jerome Powell hinted that he would not rush to raise interest rates. That led to a fall in dollar and increase in the euro.

Today, the pair may increase amid good data on industrial output in France and the whole Euro area. But in the afternoon, the highlight will be the US CPI, which could force the Fed to act more aggressively in terms of monetary policy. If that happens, demand for dollar will soar. The upcoming Fed Beige Book can be ignored as it has no importance to the forex market.

For long positions:

Buy euro when the quote reaches 1.1384 (green line on the chart) and take profit at the price of 1.1421. Growth may occur if US inflation turns out weaker than the forecasts.

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 1.1360, but the MACD line should be in the oversold area, as only by that will the market reverse to 1.1384 and 1.1421.

For short positions:

Sell euro when the quote reaches 1.1360 (red line on the chart) and take profit at the price of 1.1321. EUR / USD will decline if data on industrial production is worse than expected.

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 1.1384, however, the MACD line should be in the overbought area, as only by that will the market reverse to 1.1360 and 1.1321.

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.