Trading on EUR/USD was not convenient for traders, especially the novice, on Monday. Macroeconomic data and some technical aspects both were the reason. First of all, just one important macroeconomic report was published on Monday. The eurozone GDP in the fourth quarter came below market expectations. It triggered a fall in the euro as a result. At the same time, it was a rather modest drop. Moreover, the market showed almost no reaction to the data. Later, the pair went down by 30 pips, which was considered to be the reaction to the report. The pair grew the rest of the time, which was a technical movement. The pair plummeted last week. Therefore, an upward correction was needed, but the GDP statistics prevented it from happening. If not for the outcome of the report, the pair would most likely move in the same direction on Monday. The bearish trend continued as the pair moved in the descending channel.
The trend was clearly seen on the M5 chart. Notably, there was little help from levels on Monday. Points 1.1170 and 1.1186 became resistance. The price produced signals around the level of 1.1170 three times in the European session but failed to settle above 1.1186. Consequently, it went below 1.1170, which was interpreted as a signal to sell the instrument. As soon as the signal was produced, the quote fell by 17 pips. It happened at the time the eurozone GDP report came out. Eventually, the novice did not yield good profit. At the same time, no losses were incurred because when the pair had dropped by 15 pips, a stop-loss order was set at the breakeven point. In the Nort American session, a buy signal was generated after the price broke through the level of 1.1186, where the novice went long. The bullish move was sluggish after the signal. Nevertheless, the quote did not fall below 1.1186, which meant the novice were able to make a couple of dozen pips of profit. Generally speaking, the signals were simple and comprehensible on Monday.
How to trade EUR/USD on Tuesday:
The pair trades lower, according to the M30 chart. Since the quote has failed to break through 1.1131, the upward correction continues. The corrective move may end around the upper limit of the descending channel. The key levels for February 1 on the M5 chart are 1.1121, 1.1170-1.1186, 1.1227-1.1234, and 1.1262. There are no other levels below 1.1121, so it could be more difficult to trade there. In any case, the pair should first go below 1.1121. As for the macroeconomic calendar, the eurozone will present just one important report on Tuesday - the unemployment rate. The market is unlikely to show any reaction to the results. The ISM manufacturing PMI for January will be published in the United States. The market may become more volatile after the release.
