29.01.202606:52 Forex Analyse & Reviews: How to Trade the EUR/USD Currency Pair on January 29? Simple Tips and Trade Analysis for Beginners

Analysis of Wednesday's trades:

1H chart of the EUR/USD pair

The EUR/USD currency pair traded lower throughout Wednesday, reaching 1.1908 by the end of the day, losing almost 150 pips. Since the pair had demonstrated strong growth up to Wednesday, a correction of 150 pips is quite proportional to the main movement. At this moment, it cannot be said that the upward trend supported by the trend line has ended. We saw a noticeable correction, but it does not affect the trend. The correction itself was not provoked by macroeconomic or fundamental events. Throughout the day yesterday, only one event could attract traders' attention – the FOMC meeting. Even this event was overshadowed by other developments related to Donald Trump. Thus, the Fed could not inherently provide strong support to the dollar. The key interest rate remained unchanged, as expected. Jerome Powell stated at the press conference that a new "shutdown" could not only harm the economy but also make further rate cuts impossible due to the lack of key economic data. Thus, Powell allowed for a rate cut in March, which is a more "dovish" outcome than expected.

5M chart of the EUR/USD pair

On the 5-minute timeframe, a considerable number of trading signals were formed on Wednesday. Initially, the price bounced off the 1.1970-1.1988 area, but this signal proved false and was closed at breakeven by the Stop Loss. Then a sell signal followed in the same area, and by evening, the target – the level of 1.1908 – was reached. A bounce from the 1.1908 level allowed the opening of long positions, and in this case, the target was also achieved. However, it was probably not advisable to enter the market immediately after the FOMC meeting.

How to trade on Thursday:

The upward trend continues to form on the hourly timeframe. On Monday night, the price consolidated above the area of 1.1800-1.1830, above the range of 1.1400-1.1830, so the flat that lasted for 7 months can be considered complete. The overall fundamental and macroeconomic background remains very weak for the US dollar, so we fully support further growth of the euro currency.

On Thursday, novice traders may open new long positions if the area of 1.1970-1.1988 is overcome, with targets of 1.2044-1.2056 and 1.2092. A bounce from the area of 1.1970-1.1988 will allow for opening shorts with a target of 1.1908.

On the 5-minute timeframe, essential levels to consider are 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, 1.1830-1.1837, 1.1908, 1.1970-1.1988, 1.2044-1.2056, 1.2092-1.2104. Today, no significant events are scheduled in either the Eurozone or the US, so trading will have to rely on technical factors.

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 volatility is high, and a trend is 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.