Trade Analysis and Tips for the Euro Currency
The test at 1.1390 occurred when the MACD indicator had moved significantly below the zero mark, which limited the pair’s bearish potential. For this reason, I did not sell the euro.
Considering that yesterday market expectations shifted towards a more hawkish Federal Reserve policy, this provided the dollar with noticeable upward momentum. While participants were not pricing in a rate hike at the upcoming meeting, they increasingly allowed for a potential increase in the future, and such a sentiment typically quickly reflects in currency quotes. Against this backdrop, the euro surrendered ground.
Today, there is no significant fundamental data scheduled, with only the unemployment figures from Spain and the monthly report from the Bundesbank expected. Employment data helps assess the health of the Spanish economy, while the German central bank’s report traditionally reveals its view on inflation and regional prospects. However, the weight of these events for the market is minimal. It is unlikely they will give the euro significant momentum, so only a weakening of the dollar could reverse sentiment in favor of the euro.
As for the intraday strategy, I will primarily rely on the implementation of scenarios #1 and #2.
Buying Scenarios
Scenario #1: Today, you can buy euros at around 1.1378 (green line on the chart), with a target for growth at 1.1412. At the point of 1.1412, I plan to exit the market and also sell euros in the opposite direction, expecting a movement of 30-35 pips from the entry point. You can count on the euro’s growth only after good data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.
Scenario #2: I also plan to buy euros today in the case of two consecutive tests of the price 1.1365 at a moment when the MACD indicator is in the oversold area. This will limit the pair’s downward potential and lead to a market reversal upwards. A rise to the opposite levels of 1.1378 and 1.1412 can be expected.
Selling Scenarios
Scenario #1: I plan to sell euros after reaching the level of 1.1365 (red line on the chart). The target will be the level of 1.1342, where I intend to exit the market and immediately buy in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today in the case of poor data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from there.
Scenario #2: I also plan to sell euros today in the case of two consecutive tests of the price 1.1378 at a moment when the MACD indicator is in the overbought area. This will limit the pair’s upside potential and lead to a market reversal downwards. A decline to the opposite levels of 1.1365 and 1.1342 can be expected.
What’s on the Chart:
- Thin green line – entry price for buying the trading instrument;
- Thick green line – estimated price for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
- Thin red line – entry price for selling the trading instrument;
- Thick red line – estimated price for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
- MACD Indicator. When entering the market, it is important to be guided by the zones of overbought and oversold.
Important: New traders in the Forex market should make decisions about market entry very cautiously. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in the exchange rate. 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 with large volumes.
And remember, for successful trading, it is essential to have a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
