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Analytics and trading signals for beginners. How to trade EUR/USD on January 29? Analysis of Thursday. Getting ready for

Hourly chart of the EUR/USD pair

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The EUR/USD pair started an upward movement on Thursday and kept it throughout the day. It continued the correction the entire day after the previous day's fall. We were certain that the dollar was growing unreasonably in price, since the speech of Jerome Powell and the results of the Federal Reserve meeting did not contribute to this at all. Rather the opposite. Powell's rhetoric and the essence of the FED cover letter could be interpreted as factors that were not in favor of the dollar. Also, we should not forget that there was also published a report on orders for durable goods, which is considered quite important, and it turned out to be worse than forecasted. However, the dollar was still growing before the results of the meeting were announced, and so it "paid off its debts." In the previous article, we did not recommend novice traders to consider bull trading, as the price left the ascending channel. We advised you to track new sell signals from the MACD indicator, however, no signals were generated during the day. By the end of the day, the quotes of the pair rose so much that the indicator turned out to be above the zero level. Therefore, you can start waiting for the MACD indicator to turn down. Unfortunately, not all beginners will be able to track new signals during the evening. However, this is the foreign exchange market. It doesn't close at night.

All major macroeconomic reports were released in the US on Thursday. We can take note of only one report - the Gross Domestic Product for the fourth quarter. The forecasts predicted an increase of 4.2% q/q, but in reality the figure grew by only 4.0%. Naturally, novice traders could expect the dollar to weaken after such a figure. This does not mean that the GDP in the fourth quarter will now definitely be +4.0%. This is only the first estimate of the indicator, there will be three in total. However, at the moment it must be stated that the GDP turned out to be weaker than the expectations of traders.

No important reports planned on Friday. Meanwhile, several secondary indicators will be published in the US. Thus, we can assume that the fundamental background will be absent tomorrow, which will somewhat facilitate the task of novice traders. You should only pay attention to technical factors, which is always easier than combining technique and foundation. Thus, Friday may turn out to be calm, we are waiting for the dollar to strengthen, so far there are no signs of a resumption of the upward trend.

Possible scenarios on January 29:

1) Long positions are irrelevant at the moment, since the price left the upward channel. You can consider long positions when there is a new upward trend (trend line or channel) or a clear cancellation of the downward trend, or at least wait until Friday morning.

2) Trading for a fall remains relevant at the moment. Thus, novice traders are advised to wait for a new sell signal and open short positions while aiming for the support level of 1.2056. If the price goes above the 1.2176 level (the previous local high), then the resumption of the downward movement will be called into question.

On the chart:

Support and Resistance Levels are the Levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are the channels or trend lines that display the current trend and show in which direction it is better to trade now.

Up/down arrows show where you should sell or buy after reaching or breaking through particular levels.

The MACD indicator (14,22,3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend lines (channels and trend lines).

Important announcements and economic reports that you can always find in the news calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommended trading as carefully as possible or exit the market in order to avoid a sharp price reversal.

The material has been provided by InstaForex Company - www.instaforex.com