How to trade EUR/USD on January 28, 2022. Simple trading tips and analysis for beginners

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 On Thursday, EUR/USD extended its decline, which started the night before. On Wednesday, the US Federal Reserve, the central bank of the country, announced the results of the meeting. This is one of the most important events not only for the US dollar but also for the entire foreign exchange market. The Fed confirmed it was going to raise the key rate at almost every meeting in 2022 (a total of 8 meetings each year). A rate hike is the strongest growth factor for any currency. Accordingly, the advance of the US dollar in the last two sessions was absolutely logical. As we expected yesterday, it took some time for the market to digest the results of the meeting. So, we can say that traders had fully evaluated this event only by Thursday evening. On the 30-minute time frame, the downtrend on the euro/dollar pair continues. Still, there are no levels below 1.1131, as the price has not been there for more than a year.


On the 5-minute time frame, the pair has been moving in almost only one direction over the past 24 hours. We did not advise novice traders to open positions last night, as the risk was quite high. It was impossible to predict where the pair would move, what Jerome Powell would say at the press conference, and how the market would react. But this morning, at the opening of the European session, it was possible to sell the pair on a sell signal, which was formed half an hour earlier. The price broke through the area of 1.1227-1.1234 and continued its downward movement below 1.1186 to decline by another 50 pips. Since there was no level of 1.1131 (Thursday's low), the short position should have been closed anywhere below the level of 1.1186. This trade could have brought a minimum profit of 50-60 pips. No other trading signals were formed during the day.


Trading tips on Friday


On the 30-minute time frame, the price has left the sideways channel of 1.1234-1.1360. Over the past 24 hours, the pair has fallen by 150 pips, so an upward correction may begin on Friday. However, the downtrend still prevails, so selling the pair is more preferable. On the 5-minute chart on Friday, it is recommended to trade at the levels of 1.1131, 1.1183, 1.1227-1.1234, and 1.1262. There are no other levels below 1.1131, so it will be more difficult to trade there. But for this, the pair must still go below the level of 1.1131. The macroeconomic background will be very weak on Friday. No important publications or other events are planned in the European Union, and only minor reports will be released in the US, which are unlikely to provoke a strong market reaction. We recommend that beginners pay attention only to the University of Michigan Consumer Sentiment Index.