Trade Analysis and Tips for the Euro Currency
The test of the price at 1.1674 coincided with the moment when the MACD indicator had been in the overbought area for quite some time and was declining toward the zero mark, allowing for entering short positions on the euro. As a result, the pair dropped nearly 20 pips.
Following the release of unexpected ADP data showing a decline in U.S. private-sector employment, the U.S. currency lost ground against the euro. The November figures showed a 32,000-job reduction, an unpleasant surprise for experts who had expected an increase. Traders, concerned about a potential worsening of the economic situation, began to shed dollar-denominated assets, leading to downward pressure on the dollar's exchange rate. In contrast, the euro strengthened amid prevailing circumstances.
Today, the euro may continue to grow in the first half of the day, but strong data on changes in Eurozone retail sales for October is needed. It is expected that this indicator will remain unchanged compared to September. If the forecast holds true, it will signal a further deceleration in consumer spending in the region, which could apply additional pressure on the European Central Bank regarding further monetary easing. However, even with stagnating retail sales, some experts highlight the resilience of the Eurozone labor market, which may support consumer demand in the medium term. Nevertheless, if the actual data falls short of expectations, it could trigger a wave of concern about a slowdown in economic growth. In this case, pressure on the ECB will increase significantly, and the central bank will likely be forced to consider additional stimulus measures, such as lowering interest rates next year.
Regarding the intraday strategy, I will primarily rely on the implementation of Scenarios #1 and #2.
Buy Scenarios
- Scenario #1: Buy the euro today when the price reaches around 1.1667 (green line on the chart), targeting a rise to the level of 1.1701. At the point of 1.1701, I plan to exit the market and also sell the euro back, aiming for a movement of 30-35 pips from the entry point. Growth in the euro can only be anticipated after good data. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from there.
- Scenario #2: I also plan to buy the euro today if there are two consecutive tests of 1.1651 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. A rise to the opposite levels of 1.1667 and 1.1701 can be expected.
Sell Scenarios
- Scenario #1: I plan to sell the euro once it reaches 1.1651 (red line on the chart). The target will be 1.1621, where I plan to exit the market and buy back immediately (aiming for 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 that the MACD indicator is below the zero mark and just starting its decline from there.
- Scenario #2: I also plan to sell the euro today if there are two consecutive tests of 1.1667 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decrease to the opposite levels of 1.1651 and 1.1621 can be expected.
What's on the Chart:
- Thin green line – entry price at which you can buy the trading instrument;
- Thick green line – estimated price where you can set Take Profit or take profit yourself, as further growth above this level is unlikely;
- Thin red line – entry price at which you can sell the trading instrument;
- Thick red line – estimated price where you can set Take Profit or take profit yourself, as further decline below this level is unlikely;
- MACD Indicator. When entering the market, it is essential to be guided by overbought and oversold zones.
Important: Beginner traders in the Forex market need to make entry decisions with great caution. It is best to stay out of the market before significant fundamental reports to avoid sudden price 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 use money management and trade large volumes.
And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for the intraday trader.
