Trade analysis and trading tips for the European currency
Germany's GDP turned out slightly better than economists' forecasts, which helped euro buyers hold around the daily lows and build an upward correction. Now, a lot will depend on the data on Germany's consumer price index and statements from representatives of the European Central Bank, including De Guindos and Enria. A soft tone, following the example of Christine Lagarde, is likely to weaken the euro's position, leading to a downward surge within the sideways range. However, if the data indicate a sharp rise in inflation in Germany and policymakers take a firmer stance, the euro may rise. For this reason, I will act based on the implementation of scenario #1.
Buy Signal
Scenario #1: Today, buying the euro is possible when the price reaches around 1.0594 (green line on the chart) with a target of 1.0630. At the 1.0630 level, I recommend exiting the market and also selling the euro in the opposite direction, targeting a move of 30-35 points from the entry point. Today, you can expect the euro to rise only after data shows inflation in Germany significantly exceeding economists' forecasts. Important! Before buying, make sure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: You can also buy the euro today in the event of two consecutive price tests at 1.0572 when the MACD indicator is in the overbought zone. This will limit the pair's downward potential and lead to a reversal in the market upwards. You can expect an increase to the opposite levels of 1.0594 and 1.0630.
Sell Signal
Scenario #1: Selling the euro is possible after reaching the 1.0572 level (red line on the chart). The target will be level 1.0531, where I recommend exiting the market and immediately buying the euro in the opposite direction (with an expected move of 20–25 points in the opposite direction from the level). Pressure on the pair will increase in the event of a sharp reduction in price pressure in Germany. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting to decrease from it.
Scenario #2: You can also sell the euro today in the event of two consecutive price tests at 1.0594 when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal in the market downward. You can expect a decline to the opposite levels of 1.0572 and 1.0531.
What's on the chart:
Thin green line - the entry price at which you can buy the trading instrument;
Thick green line - the expected price at which you can set Take Profit or independently take profit, 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 expected price at which you can set Take Profit or independently take profit, as further decline below this level is unlikely;
MACD indicator. When entering the market, it is important to consider overbought and oversold zones.
Important. Novice traders in the Forex market need to make entry decisions very cautiously. It's best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you don't use proper money management and trade with large volumes.
And remember that successful trading requires a clear trading plan, similar to the one I presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.
