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26.05.2025 03:12 PM
EUR/USD: Simple Trading Tips for Beginners – May 26th (U.S. Session)

Trade Review and Tips for Trading the Euro

The price test of 1.1397 occurred when the MACD indicator had just started to move downward from the zero mark, confirming a valid short entry point and resulting in a 15-point decline for the pair.

The euro experienced a brief decline due to fading optimism following Trump's announcement about suspending new tariffs against the EU. The market appears increasingly skeptical about the likelihood of a trade deal. Despite optimistic statements from both sides, investor confidence in a real compromise is waning. They likely take into account the complex internal political processes in the EU, where reaching a consensus among member states is a challenging task. Weak economic growth and the region's high dependence on exports push the EU to seek compromise but also limit its negotiating flexibility. Thus, the euro's decline reflects not only doubts about trade talks but also deeper issues facing the European economy.

The absence of economic data in the second half of the day lowers the chances of significant price swings. In such an uncertain environment, investors act cautiously, avoiding risky trades. So don't be surprised if trading activity noticeably drops later today. Under these conditions, technical analysis remains the most effective trading approach.

For intraday strategy, I'll mostly rely on Scenario 1 and Scenario 2.

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Buy Signal

Scenario 1: Buy the euro when the price reaches 1.1394 (green line on the chart), targeting a rise to 1.1427. At 1.1427, I plan to exit the trade and open a short position in the opposite direction, aiming for a 30–35 point pullback. Important: Before buying, make sure the MACD is above the zero line and just beginning to rise.

Scenario 2: Buy the euro after two consecutive tests of 1.1374, provided that the MACD is in the oversold zone. This would limit the pair's downward potential and trigger a market reversal upward. Potential upward targets are 1.1394 and 1.1427.

Sell Signal

Scenario 1: Sell the euro when the price reaches 1.1374 (red line on the chart), with a target of 1.1344, where I plan to exit and open a long position in the opposite direction (expecting a 20–25 point reversal from that level). Important: Before selling, ensure the MACD is below the zero line and just beginning to decline.

Scenario 2: Sell the euro after two consecutive tests of 1.1394, provided that the MACD is in the overbought zone. This will limit the pair's upward potential and trigger a reversal downward. Look for a decline to 1.1374 and 1.1344.

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Chart Key:

  • Thin green line – entry price for long positions
  • Thick green line – potential Take Profit or manual exit point (further growth above this level is unlikely)
  • Thin red line – entry price for short positions
  • Thick red line – potential Take Profit or manual exit point (further decline below this level is unlikely)
  • MACD Indicator – use overbought/oversold zones to guide market entries

Important Notes for Beginners:

Forex beginners must be extremely cautious when making entry decisions. It's best to stay out of the market before important fundamental releases to avoid sharp price swings. If you choose to trade during news events, always use stop-loss orders to minimize risk. Without stop-loss protection, you can quickly lose your entire deposit—especially if you ignore money management principles and trade large volumes.

Remember: successful trading requires a clear, predefined trading plan, like the one outlined above. Spontaneous decision-making based on the current market situation is a losing strategy for intraday traders.

Jakub Novak,
Analytical expert of InstaForex
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