Analysis of Trades and Trading Tips for the Euro
The euro tested the 1.0267 level when the MACD indicator had already moved significantly above the zero mark, limiting its upward potential. As a result, I chose not to buy. The second test of 1.0267 occurred while the MACD was in the overbought zone, which prompted me to execute Scenario #2 for selling. This decision led to a drop of more than 20 pips. Following a sharp rise to the 1.0317 area, I sold on the rebound, resulting in an additional profit of 35 pips.
Yesterday, the euro strengthened after news that Trump had suspended tariffs on Mexico and Canada for a month, although the 10% tariff on China remained in place. In response, China announced new tariffs on a range of American goods, escalating trade tensions once again. This situation prompted financial market participants to reassess their positions.
Today, the only expected data is the change in unemployment figures from Spain, which is unlikely to significantly alter the balance of power between buyers and sellers. The Spanish unemployment data will simply be another piece of the broader economic puzzle, and no dramatic market shifts are anticipated. Even if the unemployment numbers are positive or negative, market changes are expected to be moderate rather than revolutionary. The primary focus will remain on the actions of the White House regarding trade wars. It's important to remember that Trump has also promised tariffs for the EU, indicating that more developments are on the horizon.
Regarding the intraday strategy, I will rely more on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro if the price reaches around 1.0314 (green line on the chart), with a target of rising to 1.0366. At 1.0366, I plan to exit the market and sell the euro in the opposite direction, expecting a movement of 30-35 pips from the entry point. It's unlikely to expect a euro rally in the first half of the day. Important! Before buying, ensure the MACD indicator is above the zero line and starting to rise.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0284 price level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth towards the opposite levels of 1.0314 and 1.0366 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.0284 level (red line on the chart). The target will be 1.0233, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20-25 pip movement back from the level). Pressure on the pair could return at any moment. Important! Before selling, make sure the MACD indicator is below the zero line and starting to decline from it.
Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.0314 price level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. A decline towards the opposite levels of 1.0284 and 1.0233 can be expected.
Chart Notes
- 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 Note for Beginner 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.
