Analysis of Trades and Tips for Trading the Euro
The first test of the price at 1.0994 occurred when the MACD indicator had risen significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy euros. Shortly after, there was another test at 1.0994, coinciding with the MACD indicator returning from the overbought zone, which allowed for the implementation of Scenario No. 2 for selling, resulting in a 15-point drop for the pair—a significant part of the intraday volatility. The European statistics were ignored, and likely the same fate awaits the U.S. data. The trade balance and the economic optimism index for the U.S. are not indicators that can change much. However, there will also be speeches from FOMC members Raphael Bostic and Susan M. Collins. Statements from politicians will be crucial in determining intraday market volatility. As for the intraday strategy, I plan to act based on the realization of Scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: I plan to buy euros today when the price reaches around 1.0998 (green line on the chart), targeting a rise to the level of 1.1028. At point 1.1028, I will exit the market and also sell euros in the opposite direction, aiming for a movement of 30-35 points from the entry point. It is unlikely that a strong upward movement for the euro will occur today. Important: Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.
Scenario No. 2: I also plan to buy euros today if there are two consecutive tests of the price at 1.0973 while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upwards. We can expect a rise to the opposing levels of 1.0998 and 1.1028.
Sell Signal
Scenario No. 1: I will sell euros after the level of 1.0973 is reached (red line on the chart). The target will be the level of 1.0935, where I plan to exit the market and immediately buy euros in the opposite direction (aiming for a movement of 20-25 points in the opposite direction from the level). Pressure on the pair will return if there are harsh comments from the Fed representatives. Important: Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline from it.
Scenario No. 2: I also plan to sell euros today if there are two consecutive tests of the price at 1.0998 while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downwards. We can expect a decrease to the opposing levels of 1.0973 and 1.0935.
What the Chart Shows:
- Thin green line: Entry price for buying the trading instrument.
- Thick green line: Presumed price where you can set Take Profit or independently secure profits, as further growth above this level is unlikely.
- Thin red line: Entry price for selling the trading instrument.
- Thick red line: Presumed price where you can set Take Profit or independently secure profits, as further decline below this level is unlikely.
- MACD Indicator: When entering the market, it is important to rely on the overbought and oversold zones.
Important: Beginner traders in the forex market need to be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in rates. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with 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 inherently a losing strategy for intraday traders.
