Analysis of Trades and Trading Tips for the Euro
The test of the 1.1460 price level in the second half of the day coincided with the MACD indicator starting to move downward from the zero line, confirming the correct entry point for selling the euro. As a result, the pair dropped by 30 pips.
Statements from Donald Trump regarding a possible reduction in trade tariffs against China and his decision to retain Jerome Powell as Chair of the Federal Reserve sparked a notable reaction in financial markets, leading to a strengthening of the dollar and a decline in interest in higher-risk assets. These comments came amid growing concerns about the global economic slowdown and the potentially negative impact of the U.S.–China trade conflict on the American economy. Market participants saw the potential removal of tariffs as a sign of willingness to compromise and ease trade tensions, which positively influenced forecasts for international trade. As for Jerome Powell, the decision to keep him at the helm of the Fed was interpreted as a sign of greater predictability and stability in U.S. monetary policy.
Today, the likelihood of a decline in the euro is relatively high, as weak PMI data is expected in both the manufacturing and services sectors of the Eurozone. In addition, market participants will closely monitor the Eurozone trade balance figures. Experts forecast a deterioration in the manufacturing PMI, indicating a potential slowdown in industrial growth. While service sector performance is expected to be relatively stable, a drop in the composite PMI could drag the euro lower. Furthermore, weak foreign trade balance data—which reflects the difference between exported and imported goods and services—could put additional pressure on the pair.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro upon reaching the entry point around 1.1405 (green line on the chart), targeting growth toward the 1.1450 level. At 1.1450, I plan to exit the long position and open a short position in the opposite direction, expecting a 30–35 pip retracement from the entry point. This buying setup should only be considered if positive data is released.
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 if the price tests the 1.1369 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downside potential and lead to a bullish market reversal. A rise toward the opposite levels of 1.1405 and 1.1450 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.1369 level (red line on the chart). The target will be the 1.1305 level, where I will exit the short position and open a buy position in the opposite direction (anticipating a 20–25 pip reversal from that level). Selling pressure may return to the pair at any moment.
Important! Before selling, make sure the MACD indicator is below the zero line and just beginning to move downward from it.
Scenario #2: I also plan to sell the euro today if the price tests the 1.1405 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upside potential and lead to a downward reversal. A decline toward the opposite levels of 1.1369 and 1.1305 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.
