Analysis of Trades and Tips for Trading the Euro
The levels I outlined in the first half of the day were not tested. Low volatility following yesterday's European Central Bank meeting, coupled with the absence of other significant statistics, was entirely expected, so the focus now shifts to the US data. We expect numbers on building permits issued in the US and speeches from FOMC members Raphael Bostic and Neel Kashkari. Strong data and a balanced tone regarding rates could provide reasons to sell the euro again. However, given the lackluster activity from major players today, trading will likely remain in a sideways channel until the end of the week. As for the intraday strategy, I will focus more on the execution of scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches the area of 1.0859 (green line on the chart) with a target of 1.0875. At 1.0875, I plan to exit the market and also sell the euro in the opposite direction, aiming for a movement of 30-35 points from the entry point. Expectations for the euro's rise today are limited to a continuation of the upward correction. Note: Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0843 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. A rise can be expected towards the target levels of 1.0859 and 1.0875.
Sell Signal
Scenario #1: I plan to sell the euro after reaching the 1.0843 level (red line on the chart). The target will be 1.0824, where I plan to exit the market and consider buying in the opposite direction (aiming for a movement of 20-25 points in the opposite direction from the level). Pressure on the pair is likely to return today if strong data comes from the US. Note: Before selling, ensure that the MACD indicator is below the zero mark and just starting its decline from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the 1.0859 level, at a time when the MACD indicator is in overbought territory. This will cap the pair's upward momentum and lead to a downward reversal. A decline can be expected towards the support levels of 1.0843 and 1.0824.
Chart Overview:
- Thin green line – Entry price where you can buy the trading instrument.
- Thick green line – Target price where you can place a Take Profit or manually lock in profits, as further growth above this level is unlikely.
- Thin red line – Entry price where you can sell the trading instrument.
- Thick red line – Target price where you can place a Take Profit or manually lock in profits, as further decline below this level is unlikely.
- MACD Indicator: When entering the market, it is crucial to consider overbought and oversold zones.
Important: Beginner traders in the Forex market need to be very cautious when making decisions about market entry. It is best to stay out of the market before the release of significant fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always place stop orders to minimize potential losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for an intraday trader.
