Analysis of Trades and Tips for Trading the Euro
The price test at 1.1592 occurred when the MACD indicator was just starting to move down from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair fell to the target level of 1.1540.
The closure of the Strait of Hormuz by Iran prompted noticeable fluctuations in the currency markets, leading to a significant decline in the value of risk-related assets. The ongoing geopolitical tensions resulting from this incident deepened uncertainty worldwide, which in turn pushed investors to seek safer investments. These changes in investor sentiment not only reflect an immediate reaction to the geopolitical crisis but also demonstrate a persistent trend toward strengthening the dollar during periods of heightened uncertainty. Many traders are concerned that this situation may drag on for an extended period, exerting prolonged negative impacts on the global economy and forcing central banks and governments to take stricter measures to contain price pressures.
Today, particular attention will be paid to the service sector business activity index in the Eurozone. This indicator serves as an important gauge of economic health, demonstrating the level of activity in one of the largest sectors. Concurrently, the composite PMI index will be presented, summing data from both the manufacturing and service sectors. Additionally, figures for the Eurozone producer price index, which serves as a precursor to future consumer inflation, and information on the unemployment rate, a direct reflection of the labor market's condition, will be released. Poor performance in these indicators could quickly apply pressure on the euro.
As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.
Buy Scenarios
Scenario No. 1: Today, buying euros can be considered if the price reaches around 1.1618 (green line on the chart), with a target of 1.1679. At point 1.1679, I plan to exit the market and also sell the euro back, expecting a movement of 30-35 pips from the entry point. Growth in the euro today can only be expected after a sharp rise in inflation. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario No. 2: I also plan to buy euros today in case of two consecutive tests of the price at 1.1584 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. An increase to opposite levels of 1.1618 and 1.1679 can be expected.
Sell Scenarios
Scenario No. 1: I plan to sell euros once the price reaches 1.1584 (red line on the chart). The target will be 1.1540, where I plan to exit the market and immediately buy back (expecting a 20-25-pip move in the opposite direction from the level). Pressure on the pair will persist today, in any case. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to drop.
Scenario No. 2: I also plan to sell euros today if two consecutive tests of 1.1618 occur while the MACD indicator is in the overbought area. This will limit the potential for upward movement in the pair and lead to a market reversal downward. A decrease to opposite levels of 1.1584 and 1.1540 can be expected.
What's on the Chart:
- The thin green line represents the entry price at which you can buy the trading instrument;
- The thick green line is the assumed price where you can set Take Profit or manually take profit, as further growth above this level is unlikely;
- The thin red line indicates the entry price at which you can sell the trading instrument;
- The thick red line is the assumed price where you can set Take Profit or manually take profit, as further decline below this level is unlikely;
- The MACD indicator. When entering the market, it's important to refer to the overbought and oversold zones.
Important: Beginner traders in the forex market need to make entry decisions very carefully. It is best to stay out of the market before the release of important fundamental reports to avoid sharp fluctuations in prices. If you choose to trade during the release of news, always set Stop Loss orders to minimize losses. Without placing Stop Loss 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. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
