Analysis of Trades and Tips for Trading the Euro
The test of the 1.1547 price level came at a time when the MACD indicator had risen sharply from the zero mark, limiting the pair's upside potential. For this reason, I didn't buy the euro. A second test of 1.1547 shortly after led to the implementation of Sell Scenario #2, resulting in a drop of more than 25 pips for the pair.
The lack of U.S. data negatively affected the dollar, providing only slight support for the euro in the afternoon. The lack of key data prevented traders from assessing the U.S. economy, creating uncertainty. The euro, in turn, gained some momentum but quickly faded. Although the euro has its own issues related to the energy crisis and recession risks, it appeared relatively more attractive against the backdrop of the dollar's informational blindness.
Today, an important report on German GDP for the third quarter of the current year is expected to be published in the first half of the day. Despite the preliminary information, today's detailed report will allow for a more accurate assessment of the German economy's state. Traders will focus on the GDP structure to determine which sectors of the economy show resilience and which face the most difficulties. Particular attention will be paid to indicators of industrial production, export, and consumer spending. The report's results could significantly affect the exchange rate of the European currency. Favorable data indicating signs of recovery in the German economy are likely to support the euro and boost investor sentiment. Conversely, negative signals suggesting a worsening recession could lead to a decline in the euro's exchange rate and increased market volatility.
Regarding the intraday strategy, I will rely more on the implementation of Scenarios #1 and #2.
Buy Scenarios
Scenario #1: Today, I can buy the euro at a price around 1.1527 (green line on the chart), with a target of 1.1555. At point 1.1555, I plan to exit the market and sell the euro back, anticipating a movement of 30-35 pips from the entry point. Reliance on the euro's growth is possible only after good data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting an upward move from it.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of 1.1512 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposing levels of 1.1527 and 1.1555.
Sell Scenarios
Scenario #1: I plan to sell the euro once it reaches 1.1512 (red line on the chart). The target will be 1.1487, at which I will exit the market and buy back immediately (anticipating a 20-25-pip move in the opposite direction from the level). Pressure on the pair will return with weak data. Important! Before selling, ensure the MACD indicator is below the zero line and just starting its downward move.
Scenario #2: I also plan to sell the euro today if there are two consecutive tests of 1.1527 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 towards the opposing levels of 1.1512 and 1.1487.
What the Chart Shows:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Estimated price where Take Profit can be set or where profit can be secured, as further increases above this level are unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: Estimated price where Take Profit can be set or where profit can be secured, as further decreases below this level are unlikely.
- MACD Indicator: When entering the market, it is important to be guided by the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making trading entry decisions. It is best to remain out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide 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 use money management and trade with large volumes.
And remember that successful trading requires having a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.
