Analysis of Trades and Tips for Trading the Euro
The price test at 1.1779 coincided with a period when the MACD indicator had moved significantly below the zero mark, confirming the correct entry point for selling euros. As a result, the pair declined by 15 pips.
The lack of reports in the lead-up to the New Year holidays is affecting the market. Many banks and major participants have already gone on holiday, reducing trading volumes and liquidity in the assets. In such a situation, even small spikes in volatility can pull the market in either direction. However, such movements typically reverse quickly.
This morning, the primary focus will be on the release of unemployment data in France. Any deviation of the actual values from the forecast can provoke brief but noticeable fluctuations in the euro’s exchange rate relative to other currencies. However, the current “thin market” situation requires traders to exercise caution and adopt a measured risk-management approach. It is not advisable to enter large trades or bet on strong directional movements. Instead, one should concentrate on short-term speculation and respond quickly to any changes in market conditions.
For the intraday strategy, I will primarily rely on the implementation of scenarios No. 1 and No. 2.
Buying Scenarios
Scenario No. 1: Today, I plan to buy euros upon reaching an entry point around 1.1770 (green line on the chart), targeting a move to 1.1808. Near 1.1808, I intend to exit my long positions and sell back, expecting a movement of 30-35 pips in the opposite direction from the entry point. Expecting the euro to rise can only be within the trend. Important! Before purchasing, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.
Scenario No. 2: I also plan to buy euros today if there are two consecutive tests of the price 1.1748 when 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 of 1.1770 and 1.1808.
Selling Scenarios
Scenario No. 1: I plan to sell euros if the price breaks the 1.1748 level (red line on the chart), which will trigger a rapid decline in the pair. The key target for sellers will be the 1.1711 level, where I intend to exit my short positions and immediately buy back (expecting a 20-25-pip move in the opposite direction from that level). Some pressure on the pair may be noticeable in the first half of the day. Important! Before selling on the breakout, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.
Scenario No. 2: I also plan to sell euros today if there are two consecutive tests of the price 1.1770 when the MACD indicator is in the overbought area. This will limit the pair’s upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 1.1748 and 1.1711.
What is on the Chart:
- Thin Green Line – the entry price at which you can buy the trading instrument;
- Thick Green Line – the assumed price where you can set Take Profit or independently capture profits, as further growth above this level is unlikely;
- Thin Red Line – the entry price at which you can sell the trading instrument;
- Thick Red Line – the assumed price where you can set Take Profit or independently capture profits, as further decline below this level is unlikely;
- MACD Indicator – when entering the market, it is important to follow the overbought and oversold zones.
Important Note:
Beginner Forex traders need to make decisions about entering the market very cautiously. Before major fundamental reports are released, it is best to remain out of the market to avoid getting caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are inherently a losing strategy for intraday traders.
