Analysis of trades and tips for trading the euro
The test of the 1.1135 price level occurred when the MACD indicator had already moved significantly upward from the zero mark, limiting the pair's further upward potential. For this reason, I did not buy the euro and was right. The Eurozone inflation data, which matched economists' forecasts, did not drive the euro's growth. Ahead of us are several U.S. reports on building permits and housing starts, but these will likely be ignored as all attention shifts to the FOMC's decision on the key interest rate. It is expected that the rate will be cut by 0.25%, but there is also a chance of a more aggressive 0.5% cut. In such a case, the euro will rise sharply against the U.S. dollar. Particular attention should be given to the FOMC's economic forecast and Jerome Powell's speech. His dovish tone would only exacerbate the U.S. dollar's problems, pushing the EUR/USD pair even higher. Otherwise, we can expect the euro to decline actively. Regarding the intraday strategy, I plan to act based on the implementation of scenario #1, despite the MACD indicator readings, as I expect a strong, directional movement.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches the 1.1144 level (green line on the chart), targeting a rise to 1.1202. At 1.1202, I will exit the market and enter a short position on the euro, aiming for a 30-35 point movement from the entry point. You can expect a strong upward move for the euro today if a 0.5% rate cut occurs. Note: Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1110 price level, at a time when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to an upward reversal. You can expect a rise to the opposite levels of 1.1144 and 1.1202.
Sell Signal
Scenario #1: I will sell the euro after reaching the 1.1110 level (red line on the chart). The target will be 1.1054, where I plan to exit the market and immediately buy the euro in the opposite direction, aiming for a 20-25 point movement from the level. Selling pressure on the pair will increase if the Fed takes a hawkish stance. Note: Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1144 price level, at a time when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a market reversal downward. You can expect a decline to the opposite levels of 1.1110 and 1.1054.
What's on the chart:
- Thin green line – entry price for buying the euro.
- Thick green line – estimated price where you can place Take Profit or manually fix profit, as further growth above this level is unlikely.
- Thin red line – entry price for selling the euro.
- Thick red line – estimated price where you can place Take Profit or manually fix profit, as further decline below this level is unlikely.
- MACD indicator – When entering the market, it's important to use overbought and oversold zones.
Important: Beginner traders in the forex market should be very cautious when making decisions about entering the market. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without stop orders, you risk quickly losing your entire deposit, especially if you're not practicing money management and trading with large volumes.
Keep in mind that successful trading requires a clear plan, such as the one outlined above. Spontaneous trading decisions based on the current market situation are often a losing strategy for intraday traders.
