Analysis of trades and trading tips for the European currency

The price test at 1.1627 occurred at a moment when the MACD indicator had moved far down from the zero mark, which limited the pair's downside potential. For this reason, I did not sell the euro and missed the move down.

Strong data on the Philly Fed manufacturing index and statements by Federal Reserve officials yesterday sparked a rise in the dollar. Traders interpreted this as confirmation of the central bank's intention to pursue a tight monetary policy despite growing concerns about a slowdown in labor market growth.

This morning, CPI indices for Germany and Italy are expected to be published. These figures will be an important indicator of the health of the European economy and will significantly impact financial market dynamics. Traders' attention is focused on these numbers because they directly affect the European Central Bank's monetary policy decisions. Inflation in Germany is forecast to remain stably below the ECB's target, which is unlikely to impact the currency market. The situation in Italy is broadly similar, although slightly more active price growth is expected there. Thus, today's CPI data for Germany and Italy are unlikely to change the market direction, so it is better to continue acting along the pair's downward trend.

Regarding the intraday strategy, I will rely primarily on the implementation of scenarios No. 1 and No. 2.

Scenarios for buying

Scenario No. 1: today you can buy the euro upon reaching around 1.1619 (green line on the chart) with a target to rise to 1.1640. At 1.1640, I plan to exit the market and also sell the euro in the opposite direction, expecting a move of 30–35 pips from the entry point. Growth in the euro can only be counted on after strong data. Important! Before buying, make sure the MACD indicator is above the zero line and is only just starting to rise from it.

Scenario No. 2: I also plan to buy the euro today if two consecutive tests of 1.1602 occur while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels 1.1619 and 1.1640.

Scenarios for selling

Scenario No. 1: I plan to sell the euro once it reaches 1.1602 (the red line on the chart). The target will be 1.1584, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Pressure on the pair may quickly return today. Important! Before selling, make sure the MACD indicator is below the zero line and is only just starting to fall from it.

Scenario No. 2: I also plan to sell the euro today if two consecutive tests of 1.1619 occur while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. One can expect a decline to the opposite levels 1.1602 and 1.1584.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.