Analysis of Trades and Trading Recommendations for the Euro
The test of the 1.0497 level coincided with the moment when the MACD indicator was beginning to move down from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair declined by about 20 pips, after which the pressure on the euro eased.
Weak economic indicators from the U.S. underscored the importance of monitoring macroeconomic data, as emphasized multiple times during Federal Reserve Chairman Jerome Powell's speech yesterday. During the meeting, Powell highlighted the significance of carefully analyzing macroeconomic indicators that reflect the state of the economy. He noted that current labor market data has reduced tension within the Federal Reserve but still requires vigilance regarding changes in financial conditions.
Today's focus should be on data regarding changes in Germany's industrial orders and the Eurozone's retail sales. In recent months, data on industrial orders in Germany have shown weakness, fueling some pessimism. A decline in new orders would signal a weakening industrial sector, particularly in automotive and machinery manufacturing industries. If this trend continues, it could negatively impact Germany's economic growth. Industrial production data from France may show some recovery, but given recent political events there, the report will likely carry limited weight. Retail sales data from the Eurozone is also important for the overall dynamics of the currency. Steady growth in consumer demand reflects economic stability and boosts investor confidence. However, if the figures indicate a decline in consumption, it could lead to lower inflation and monetary policy easing, which would negatively affect the euro.
Any weak data from the Eurozone today could quickly renew pressure on the euro. For the intraday trading strategy, I will primarily focus on implementing Scenario 1 and Scenario 2.
Buy Signal
Scenario 1: Today, I plan to buy the euro if the price reaches around 1.0531 (green line on the chart), with a target of rising to 1.0568. At 1.0568, I intend to exit the market and sell the euro immediately on a rebound, expecting a movement of 30-35 points from the entry point. Anticipating euro growth today in the first half of the day is feasible only after positive data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise.
Scenario 2: I also plan to buy the euro today if the MACD indicator shows two consecutive tests of the 1.0515 price level when the pair is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected to the opposite levels of 1.0531 and 1.0568.
Sell Signal
Scenario 1: I plan to sell the euro after the price reaches 1.0515 (red line on the chart). The target will be 1.0481, where I intend to exit the market and buy immediately on a rebound (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair can return anytime, but selling is preferable from higher levels. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decline.
Scenario 2: I also plan to sell the euro today in the event of two consecutive tests of the 1.0531 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline can be expected to the opposite levels of 1.0515 and 1.0481.
What's on the Chart:
- Thin green line: Entry price for buying the trading instrument.
- Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
- Thin red line: Entry price for selling the trading instrument.
- Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
- MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.
Important Notes for Beginner Forex Traders:
- Always approach market entry decisions cautiously.
- Avoid trading during major news releases to sidestep volatile price swings.
- If trading during news releases, always set stop-loss orders to minimize losses.
- Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
- A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.
