Trade breakdown and guidance on trading the euro
The test of the 1.1753 price level occurred at a time when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy euros.
The rise in the euro area unemployment rate to 6.3% was seen as routine and did not lead to a significant drop in the euro's exchange rate. Investors were likely prepared for such an outcome, given the slowdown in the region's economic growth in recent months. Nevertheless, despite the muted reaction to the unemployment data, the euro continues to face pressure. The latest inflation and manufacturing sector data, combined with higher unemployment, are not good news for the European Central Bank. This puts the ECB in a difficult position: on the one hand, it needs to consider ways to stimulate growth, while on the other, it must avoid a resurgence of price pressures, which are likely to return by year-end following U.S. tariff measures.
The second half of today will be rich in U.S. macroeconomic reports closely watched by investors. These releases are expected to provide a clearer picture of both the labor market and manufacturing. Special attention will be given to the weekly initial jobless claims report, as it is a key indicator of current labor market conditions. Experts will compare the actual numbers with forecasts to gauge whether the labor market is holding steady or showing signs of slowing growth. Meanwhile, the Challenger job cuts report will provide deeper insight into labor market trends, as it shows company layoff plans and may signal future changes in unemployment. An increase in this index could indicate worsening employment prospects, which in turn could negatively affect consumer spending and overall economic development.
Factory orders data will also attract traders' attention, as this reflects the condition of the manufacturing sector, one of the key drivers of economic growth. The day will conclude with a speech by FOMC member Lorie K. Logan. Investors will closely analyze her comments for clues on the Fed's future monetary policy actions. Any hints of policy easing could significantly affect the U.S. dollar.
As for intraday strategy, I will focus more on implementing Scenarios #1 and #2.
Buy Signal
Scenario #1: Buy euros today upon reaching the price area around 1.1762 (green line on the chart) with the goal of rising to 1.1800. At 1.1800, I plan to exit the market and also sell euros in the opposite direction, expecting a 30–35 point move from the entry point. A euro rally today is likely only after weak U.S. data.Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy euros today in case of two consecutive tests of the 1.1746 price level, when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal upward. Growth can then be expected toward 1.1762 and 1.1800.
Sell Signal
Scenario #1: I plan to sell euros after reaching the 1.1746 level (red line on the chart). The target is 1.1712, where I plan to exit and immediately buy in the opposite direction, expecting a 20–25 point move back up from that level. Selling pressure will return if U.S. statistics are strong.Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to decline from it.
Scenario #2: I also plan to sell euros today in case of two consecutive tests of the 1.1762 price level, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal downward. A decline can then be expected toward 1.1746 and 1.1712.
Chart Legend:
- Thin green line – entry price for buying the instrument.
- Thick green line – suggested price for setting Take Profit or manually fixing profits, as growth beyond this level is unlikely.
- Thin red line – entry price for selling the instrument.
- Thick red line – suggested price for setting Take Profit or manually fixing profits, as a decline below this level is unlikely.
- MACD indicator – when entering the market, it is important to rely on overbought and oversold zones.
Important. Beginner Forex traders should make entry decisions very carefully. Before major fundamental reports are released, it is best to stay out of the market to avoid sudden price swings. If you choose to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you neglect money management and trade large volumes.
And remember: successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are a losing strategy for an intraday trader from the start.
