Overview of trading and tips on EUR/USD
The price test of 1.0854 occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's potential to rise—especially considering that the euro has been facing considerable issues with growth recently. After a short period, another test of 1.0854, while the MACD was in the overbought zone, allowed Scenario No. 2 to be realized. As a result, EUR/USD dropped more than 15 pips. Data on European Manufacturing and Services PMI data exerted pressure on the pair during the first half of the day, and US PMI data stopped the bulls from regaining control of the market.
Today, a significant amount of data in the first half of the day could influence the pair's direction. Reports on the IFO business climate, current conditions, and expectations from Germany may warrant investor interest. Furthermore, the EU's economic calendar will feature data on the eurozone's M3 money supply, private sector lending, and speeches by European Central Bank board member Joachim Nagel and ECB President Christine Lagarde. A positive fundamental backdrop could help the euro regain its position against the dollar. As for the intraday strategy, I will rely more on implementing scenarios No. 1 and 2.
Buy signals
Scenario No 1. Today, you can buy the euro when the price reaches the area around 1.0852 plotted by the green line on the chart, with the goal of rising to the level of 1.0874. At the level of 1.0874, I plan to exit the market and also sell the euro in the opposite direction, counting on a movement of 30-35 pips from the entry point. We can count on the euro to rise today after good data on the eurozone and Germany. Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No 2. I am also going to buy the euro today in case of two consecutive tests of the price at 1.0834 when the MACD indicator is in the oversold area. This will limit the downward potential of the instrument and lead to a reverse market upturn. One can expect growth to the opposite levels of 1.0852 and 1.0874.
Sell signals
Scenario No 1. I plan to sell the euro after it reaches the level of 1.0834 plotted by the red line on the chart. The target will be the level of 1.0815, where I am going to exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on EUR/USD will return today if the pair fails to consolidate in the area of the intraday high and weak data. Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No 2. I am also going to sell the euro today in case of two consecutive price tests of 1.0852 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.0834 and 1.0815.
What's on the chart:
The thin green line is the entry price at which you can buy the trading instrument.
The thick green line is the estimated price where you can set Take-Profit (TP) or manually close positions, as further growth above this level is unlikely.
The thin red line is the entry price at which you can sell the trading instrument.
The thick red line is the price where you can set Take-Profit (TP) or manually close positions, as further decline below this level is unlikely.
MACD line: it is important to be guided by overbought and oversold areas when entering the market
Important: Novice traders in the forex market need to be very careful when making decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade in large volumes.
And remember, for successful trading, it is necessary to have a clear trading plan, similar to the one I presented above. Spontaneously making trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
