Trade Analysis and Recommendations for the Euro Currency
The tests of the levels I indicated in the second half of the day did not take place, so I was left without trades. The absence of U.S. reports due to the shutdown, which is approaching its monthly mark, negatively affected the U.S. dollar's position. Given that today marks the start of the Federal Reserve meeting, this factor discourages traders from making active dollar purchases—especially amid the recent dovish rhetoric from committee members. The geopolitical situation also plays a role, particularly the ongoing trade conflict between the U.S. and China, which may de-escalate after the upcoming meeting between Xi and Trump.
Regarding today, only the preliminary GfK consumer confidence index, reflecting the situation in Germany, is expected. Despite its seeming insignificance compared to other macroeconomic indicators, fluctuations in the consumer climate index can significantly impact the euro's dynamics. Investors and economists monitor this indicator to gauge German consumers' confidence in the current economic situation and their propensity to spend. In conditions of normal inflation and unstable geopolitics, consumer sentiment becomes particularly important, shaping the prospects for economic growth in Germany. The market's reaction to the GfK index report will depend on how closely the actual data align with expectations. If the figure greatly exceeds forecasts, the euro may experience a brief rise. Conversely, negative data could increase pressure on the euro.
Regarding the intraday strategy, I will focus more on implementing Scenarios No. 1 and No. 2.
Buy Scenarios
Scenario No. 1: I plan to buy the euro today upon reaching the entry point around 1.1672 (green line on the chart), targeting a rise to 1.1703. At this point, I will exit the market and sell the euro in the opposite direction, expecting a movement of 30-35 pips from the entry point. One can only anticipate euro growth after good data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario No. 2: I also plan to buy the euro today if there are two consecutive tests of 1.1653 while the MACD indicator is in the oversold area. This will limit the downside potential of the pair and lead to an upward market reversal. One can expect growth towards the opposite levels of 1.1672 and 1.1703.
Sell Scenarios
Scenario No. 1: I plan to sell the euro once it reaches 1.1653 (red line on the chart). The target will be 1.1622, at which I will exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips from that level). Pressure on the pair will return today with weak reports. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No. 2: I also plan to sell the euro today if there are two consecutive tests of 1.1672 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal. One can expect a decline towards the opposite levels of 1.1653 and 1.1622.
What's on the Charts:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Estimated price for setting Take Profit or manually securing profits since further growth above this level is unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: Estimated price for setting Take Profit or manually securing profits since further decline below this level is unlikely.
- MACD Indicator: It is important to be guided by overbought and oversold zones when entering the market.
Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sudden fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not employ money management and trade in large volumes.
And remember, to trade successfully, you need to have a clear trading plan, like the one I presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
