Analysis of Trades and Trading Tips for the Euro
The price test at 1.1306 coincided with the MACD indicator's just-starting upward movement from the zero mark, confirming the correct entry point for buying the euro and resulting in a 40-pip rise.
Disappointing growth figures for the U.S. economy in the first quarter of the current year triggered a surge in the euro's exchange rate and a simultaneous dollar depreciation. Investors, alarmed by signs of slowing economic growth in the United States, began actively selling the U.S. currency and shifted their focus back to the euro.
During the first half of the day, a series of economic indicators are expected to be published, including Germany's retail sales data, the Consumer Price Index, and the volume of private sector lending in the eurozone. These figures represent an important test for assessing the current state of the European economy. Retail sales in Germany, the largest economy in the eurozone, serve as a key indicator of consumer activity. The Consumer Price Index (CPI) is another crucial indicator the European Central Bank closely monitors. A decline in the CPI could encourage the ECB to maintain a dovish monetary policy.
Finally, the dynamics of private sector lending in the eurozone allow us to assess how actively banks lend to businesses and households. Growth in lending volumes usually indicates healthy economic growth and business optimism, which positively impacts the euro. A decline in lending activity could signal economic difficulties and caution among lenders, putting pressure on the currency.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: Today, I plan to buy the euro upon reaching the price area of around 1.1365 (green line on the chart) with a target of rising to 1.1448. At 1.1448, I plan to exit the market and open a sell position in the opposite direction, aiming for a 30–35 pip move from the entry point. It is advisable to place bets on the euro's growth only after receiving favorable data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement.
Scenario #2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1331 level when the MACD indicator is in the oversold area. This would limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposing levels of 1.1365 and 1.1448.
Sell Scenario
Scenario #1: I plan to sell the euro after reaching the 1.1331 level (red line on the chart). The target will be the 1.1273 level, where I plan to exit the market and immediately open a buy position in the opposite direction, aiming for a 20–25 pip move from the entry point. Downward pressure on the pair can return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning its downward movement.
Scenario #2: I also plan to sell the euro today if the MACD indicator shows two consecutive tests of the 1.1365 level when the pair is in the overbought area. This would limit the pair's upside potential and lead to a market reversal downward. A decline can be expected toward the opposing levels of 1.1331 and 1.1273.
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.
