Trade Analysis and Tips for Trading the Euro
The test of the 1.1180 price occurred when the MACD indicator started to move down from the zero mark, which confirmed the correct entry point for selling the euro. As a result, the pair moved down by about 40 pips, reaching the target level of 1.1139, where I planned to buy the euro on a rebound. The upward correction amounted to about 20 pips. Yesterday's data on the Consumer Price Index (CPI) in Germany and Italy came out below economists' forecasts, and the slowdown in inflation growth is a reason for the European Central Bank to continue lowering rates, which weakened the euro. Statements from Federal Reserve Chair Jerome Powell positively impacted the US dollar, as his words did not contain clear hints of further aggressive rate easing. Today, in the first half of the day, figures for the Manufacturing PMI in Germany, the Manufacturing PMI in Italy and France, and the entire Eurozone will be released. Weak data would mean a weak euro, capable of continuing yesterday's decline. News about the decrease in the Eurozone's CPI in September of this year will also not add confidence to euro buyers. As for the intraday strategy, I will rely more on implementing Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches the area around 1.1149 (green line on the chart) with a target level of 1.1197. At the 1.1197 point, I plan to exit the market and also sell the euro in the opposite direction, aiming for a movement of 30-35 pips from the entry point. You should count on the euro's growth today in the first half of the day only if there is strong data from the Eurozone. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.1128 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upwards. We can expect growth toward the opposite levels of 1.1149 and 1.1197.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the level of 1.1128 (red line on the chart). The target will be the 1.1094 level, where I plan to exit the market and immediately buy in the opposite direction (targeting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today if there's an unsuccessful attempt to rise beyond the daily high and weak manufacturing data. Important! Before selling, make sure the MACD indicator is below the zero mark and starting to decline from it.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the 1.1149 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and will lead to the market reversal downwards. A decline to the opposite levels of 1.1128 and 1.1094 can be expected.
What's on the Chart:
Thin green line: Entry price at which you can buy the trading instrument.
Thick green line: The anticipated price where you can set Take Profit or manually lock in profits, as further growth above this level is unlikely.
Thin red line: Entry price at which you can sell the trading instrument.
Thick red line: The anticipated price where you can set Take Profit or manually lock in 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: Novice 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 sudden exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You can quickly lose your entire deposit without stop orders, especially if you do not use money management and trade in 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.
