Analysis of Trades and Trading Tips for the Euro
The price test at 1.1312 in the second half of the day coincided with the MACD indicator having already moved significantly above the zero line, which limited the pair's upward potential. A second test of this level occurred a short time later, triggering scenario #2 for selling, resulting in a drop of over 80 pips.
Following the signing of the trade pact with Britain, Donald Trump's more restrained rhetoric regarding the possibility of similar agreements with China and the European Union had a notable impact on currency quotes. The market interpreted these remarks as a potential softening of the U.S. trade strategy, supporting the U.S. dollar. At the same time, the euro came under pressure. Uncertainty regarding trade negotiations with the U.S. and ongoing economic difficulties in the eurozone have reduced trader interest in the euro. There are concerns that prolonged trade disputes could negatively affect European exports and economic growth.
Today, Italy's industrial production volume is the only data on the agenda. The market will continue digesting the Federal Reserve's decision to leave interest rates unchanged, and any signs of recovery in the Italian economy will likely take a back seat. Under these conditions, the euro is unlikely to show stable growth. Instead, further weakening of the euro against the U.S. dollar and other major global currencies is more likely.
For the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.
Buy Scenario
Scenario #1: I plan to buy the euro today if the price reaches around 1.1244 (green line on the chart), with a target at 1.1285. At 1.1285, I plan to exit the market and sell the euro in the opposite direction, aiming for a 30–35 pip reversal from the entry point. A strong rise in the euro may follow positive data.
Important: Before buying, ensure the MACD indicator is above the zero line and beginning to rise.
Scenario #2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1213 level while the MACD indicator is in the oversold area. This would limit the pair's downside potential and trigger a reversal to the upside. A rise toward 1.1244 and 1.1285 can be expected.
Sell Scenario
Scenario #1: I plan to sell the euro after reaching the 1.1213 level (red line on the chart), with a target at 1.1167, where I plan to exit the sell trade and immediately open a buy in the opposite direction (aiming for a 20–25 pip reversal from the level). Pressure on the pair may return at any moment.
Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.
Scenario #2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1244 level while the MACD indicator is in the overbought area. This would limit the pair's upward potential and trigger a reversal to the downside. A decline toward 1.1213 and 1.1167 can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
