Analysis of Trades and Trading Tips for the Euro
The 1.1800 price test occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downside potential. For this reason, I did not sell the euro. The second test of this level occurred while the MACD was in the oversold zone, which allowed buy scenario #2 to unfold; however, the trade closed with a loss as the euro continued to decline.
Yesterday's release of positive ISM Manufacturing Index data supported the U.S. dollar. Statements by the Federal Reserve Chair that the current trade policy of the Trump administration does not yet warrant interest rate cuts also contributed to the dollar's strength.
Today, we expect the unemployment data from the eurozone and a speech by European Central Bank President Christine Lagarde. These events could trigger a spike in volatility. Unemployment data serve as an important barometer of the European economy, reflecting its stability or emerging difficulties. A decline in unemployment could strengthen confidence in the eurozone's economic growth and support the euro. Lagarde's speech—if it addresses monetary policy—will provide the market with guidance. Investors will carefully analyze her words for clues on potential interest rate adjustments. Clear signals that the ECB intends to intensify its fight against inflation due to the euro's strength could lead to a decline in the EUR/USD pair.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: Buy the euro today at around 1.1811 (green line on the chart) targeting a rise to 1.1859. At 1.1859, I plan to exit the market and sell the euro on the rebound, aiming for a 30–35-pip pullback from the entry level. You can expect the euro to remain strong today, following the release of positive data.
Important: Before buying, ensure the MACD indicator is above the zero line and just starting to rise from it.
Scenario #2: I will also consider buying the euro today if there are two consecutive tests of 1.1789 while the MACD is in the oversold zone. This will limit the pair's downside potential and trigger a reversal to the upside. One can expect growth toward the opposite levels 1.1811 and 1.1859.
Sell Scenario
Scenario #1: I plan to sell the euro after it reaches the level of 1.1789 (red line on the chart), targeting 1.1742, where I intend to exit the market and buy on the rebound (expecting a 20–25-pip bounce in the opposite direction). Downward pressure on the pair may return if today's data disappoints.
Important: Before selling, ensure the MACD indicator is below the zero line and is just beginning to decline from it.
Scenario #2: I will also consider selling the euro today if there are two consecutive tests of 1.1811 while the MACD is in the overbought zone. This will limit the pair's upside potential and trigger a reversal to the downside. A decline can be expected toward the opposite levels 1.1789 and 1.1742.
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.
