Analysis of Trades and Tips for Trading the Euro
The first test of the 1.0827 level occurred when the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential—especially within the downward trend observed the previous day. For this reason, I did not buy the euro. The second test of this level, after a short time, coincided with the MACD being in the overbought zone, which allowed for the implementation of Scenario #2 for selling the euro. As a result, the pair fell by only 10 points, accounting for half of the intraday volatility. The Richmond Fed Manufacturing Index and a speech by FOMC member Patrick T. Harker are the key events in the second half of the day. The euro's growth potential appears limited—especially considering the stance of the Federal Reserve members who have recently advocated for a cautious approach to lowering interest rates. Regarding the intraday strategy, I plan to focus more on implementing Scenario #2.
Buy Signal
Scenario #1: Today, buying the euro is possible if the price reaches the area around 1.0835 (green line on the chart), with the target of rising to the 1.0855 level. At the 1.0855 point, I plan to exit the market and also sell the euro in the opposite direction, aiming for a 30-35 point move from the entry point. It is unlikely that we will see strong growth in the euro in the second half of the day. Important: 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 1.0812 level when the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward reversal. A rise toward the levels of 1.0835 and 1.0855 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after reaching the 1.0812 level (red line on the chart). The target will be the 1.0785 level, where I plan to exit the market and immediately buy in the opposite direction (targeting a 20-25 point move in the opposite direction from the level). The pressure on the pair will return today if the Fed members adopt a more hawkish stance. Important: 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 if there are two consecutive tests of the 1.0835 level when the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline to the levels of 1.0812 and 1.0785 can be expected.
Chart Overview:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Approximate price where take profit orders can be set or profits can be secured, as further growth above this level is unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: Approximate price where take profit orders can be set or profits can be secured, as further decline below this level is unlikely.
- MACD Indicator: It is important to consider overbought and oversold zones when entering the market.
Important: Beginner traders in the forex market should be very careful when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price movements. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without using stop-loss orders, you can quickly lose your entire capital, especially if you do not practice money management and trade in large volumes.
And remember, successful trading requires having a clear trading plan, like the example I provided above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for intraday traders.
