Analysis of Trades and Tips for Trading the Euro
Testing the price level of 1.0834 occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's further downward potential. For this reason, I did not sell the euro. A similar situation happened with the price at 1.0852. At the time of the test, the MACD had also moved quite far from the zero mark, limiting the pair's further growth, especially after weak IFO statistics from Germany.
A much more interesting period lies ahead as data covering the entire American economy is released. We expect figures for GDP changes for the second quarter of this year and the Personal Consumption Expenditures (PCE) index for June. These two key indicators will have a strong impact on the market. In the case of weak statistics, the US dollar will likely fall and the euro will rise. Also, remember the weekly data on initial jobless claims and changes in durable goods orders. Regarding the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the euro when the price reaches around 1.0864 (the green line on the chart) to rise to 1.0901. At 1.0901, 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 of the euro today can be expected based on weak US GDP statistics. Important! Before buying, ensure the MACD indicator is above the zero mark and is just beginning to rise.
Scenario #2: Today, I also plan to buy the euro in case of two consecutive tests of the price at 1.0843 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. Expect growth to the levels of 1.0864 and 1.0901.
Sell Signal
Scenario #1: I will sell the euro after reaching the level of 1.0843 (the red line on the chart). The target is 1.0805, where I plan to exit the market and buy the euro immediately in the opposite direction, expecting a movement of 20-25 points away from the level. Pressure on the pair will return in case of unsuccessful strong US GDP data. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline.
Scenario #2: Today, I also plan to sell the euro in case of two consecutive price tests at 1.0864 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. Expect a decline to the levels of 1.0843 and 1.0805.
Chart Explanation:
- Thin green line – the entry price for buying the trading instrument;
- Thick green line – the assumed price for placing Take Profit or independently fixing profit, as further growth above this level is unlikely;
- Thin red line – the entry price for selling the trading instrument;
- Thick red line – the assumed price for placing Take Profit or independently fixing profit, as further decline below this level is unlikely;
- MACD Indicator – it is important to be guided by the overbought and oversold zones when entering the market.
Important Advice: Beginner traders in the Forex market should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid being caught in sharp rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
And remember, for successful trading, it is necessary to have a clear trading plan, such as the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
