Analysis of Trades and Advice on Trading the European Currency
The price test at 1.1562 coincided with the moment when the MACD indicator was just starting to move upward from the zero mark, confirming the correct entry point for buying euros; however, a significant rise in the pair did not occur.
Recent events in the Middle East, related to the escalation of relations between the US and Iran, once again triggered a noticeable surge in the US dollar.
Today promises to be eventful for the currency market, especially for the euro. The publication of the European Central Bank's decision on the main interest rate, scheduled for today, is a focus for analysts and traders. Alongside this, the press conference by ECB President Christine Lagarde will provide an opportunity to gain a deeper understanding of monetary policy prospects.
Most market participants expect the ECB to raise the key interest rate by 0.25%. If implemented, this step would be a logical continuation of efforts to curb inflation in the eurozone, which remains elevated. However, beyond the mere fact of the hike, it will be critical to analyze Lagarde's rhetoric. Market participants will be closely searching for any hints regarding the ECB's future steps. Will this be a one-time decision, or does the bank intend to continue the cycle of tightening monetary policy in the near future? Answers to these questions could significantly impact the long-term trends of the EUR/USD pair.
As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.
Buying Scenarios
Scenario #1: Today, euro purchases can be made upon reaching a price of around 1.1557 (green line on the chart), with a target to reach 1.1594. At point 1.1594, I plan to exit the market and also sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. One can only expect euro growth after good data from the eurozone. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.
Scenario #2: I also plan to buy euros today in the event of two consecutive tests of the price at 1.1540, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. One can expect growth to the opposite levels of 1.1557 and 1.1594.
Selling Scenarios
Scenario #1: I plan to sell euros once the price reaches 1.1540 (the red line on the chart). The target will be 1.1505, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair today will return only in case of very weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.
Scenario #2: I also plan to sell euros today in the event of two consecutive tests of the price at 1.1557, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 1.1540 and 1.1505.
What's on the Chart:
Thin green line – entry price for buying the trading instrument;
Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
Thin red line – entry price for selling the trading instrument;
Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp 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 are not using money management and are trading large volumes.
And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
