Trade Analysis and Advice on Trading the European Currency
The price test at 1.0630 in the first half of the day occurred when the MACD indicator was starting to move up from the zero mark, which, along with decent data from the eurozone, allowed for a buy signal for the euro. However, as you can see on the chart, a normal upward correction did not occur. Yes, data from the ZEW Institute, especially for Germany, turned out to be much better than economists' forecasts, but this only allowed the euro to stay afloat, not leading to a pair's growth. In the second half of the day, we await statistics on the volume of building permits issued and the number of new foundations laid. The real estate market and its "weather" are very important for the Fed, so maintaining stability may favor the dollar. Strong data on industrial production growth is a reason for buying the dollar and selling the euro. As for the intraday strategy, I will rely more on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches around 1.0639 (green line on the chart), with the target of rising to the level of 1.0672. At the point of 1.0672, I will exit the market and also sell the euro in the opposite direction, targeting a movement of 30–35 points from the entry point. The rise of the euro today can be expected after very poor statistics from the US. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the price at 1.0618 at a time when the MACD indicator is in oversold territory. This will limit the downside potential of the pair and lead to an upward reversal of the market. You can expect growth to the opposite levels of 1.0639 and 1.0672.
Sell Signal
Scenario #1: I will sell the euro after reaching the level of 1.0618 (red line on the chart). The target will be the level of 1.0585, where I plan to exit the market and buy the euro immediately in the opposite direction (targeting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return in the event of strong data from the US. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the price at 1.0639 at a time when the MACD indicator is in overbought territory. This will limit the upside potential of the pair and lead to a downward reversal of the market. You can expect a decline to the opposite levels of 1.0618 and 1.0585.
What's on the chart:
Thin green line - entry price for buying the trading instrument.
Thick green line - the expected price where you can set Take Profit or independently take profits, as further growth above this level is unlikely.
Thin red line - entry price for selling the trading instrument.
Thick red line - the expected price where you can set Take Profit or independently take profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to rely on overbought and oversold zones.
Important. Beginner traders in the forex market need to be very cautious when making trading decisions. It is best to stay out of the market before important fundamental reports to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to lose your entire deposit quickly, especially if you do not use money management and trade in large volumes.
And remember that successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
