Analysis of Trades and Trading Tips for the Euro
Due to the low market volatility, the levels I mentioned were not tested. The absence of statistics from the eurozone played its part, as did the anticipated speeches from key Federal Reserve officials scheduled for the second half of the day. FOMC members Michael S. Barr and Michelle Bowman will speak first, but more importantly, Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell will also address the public. Powell's assessment of the current monetary policy, which impacts the labor market, inflation, and the economy, can influence the direction of the dollar and risk assets, including the euro. A hawkish stance from Powell in the fight against inflation is likely to lead to a drop in EUR/USD, while hints of a pivot, which traders and investors have been expecting since the spring of this year, will lead to further growth in EUR/USD according to the trend. As for the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro upon reaching the price area of 1.0840 (green line on the chart) with the target of rising to 1.0879. At 1.0879, I will exit the market and sell the euro in the opposite direction, expecting a movement of 30-35 points from the entry point. A strong upward movement in the euro can be expected only after Powell's dovish position. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.
Scenario #2: Today, I also plan to buy the euro if the price at 1.0815 is tested twice consecutively when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a market reversal upwards. Growth can be expected to the opposite levels of 1.0840 and 1.0879.
Sell Signal
Scenario #1: I will sell the euro after reaching the 1.0815 (red line on the chart). The target will be the level of 1.0770, where I plan to exit the market and immediately buy the euro in the opposite direction (expecting a movement of 20-25 points in the opposite direction from the level). Pressure on the pair will return in case of an unsuccessful attempt to break beyond the daily high and a hawkish stance from the Fed. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.
Scenario #2: Today, I also plan to sell the euro if the price at 1.0840 is tested twice consecutively 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 1.0815 and 1.0770 can be expected.
Chart Indicators:
- Thin green line – the entry price at which you can buy the trading instrument.
- Thick green line – the presumed price where you can set Take Profit or independently fix 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 presumed price where you can set Take Profit or independently fix profits, as further decline below this level is unlikely.
- MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.
Important. Beginner traders in the forex market must be cautious about market entry decisions. It is best to stay out of the market before releasing important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, for successful trading, you need to have a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
