Review of Trades and Trading Tips for the Euro
The test of the 1.1601 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.
The euro showed little reaction to today's eurozone inflation data for May. Once again, energy prices were the main driver behind the increase in inflation, but this was widely expected and had already been priced in by market participants.
Ahead, we have the retail sales report and the FOMC interest rate decision. The rate is expected to remain unchanged, but the first press conference of the new FOMC Chair, Kevin Warsh, will be far more important.
The new head of the institution, who recently assumed office, will appear before journalists and the public for the first time as the key figure in US monetary policy. The future direction of the US dollar will largely depend on his remarks, rhetoric, and any hints regarding future policy actions. Investors will carefully analyze every statement, looking for signals about inflation trends, the pace of economic growth, and, of course, future interest rate decisions. Particular attention will be paid to any indications regarding the possible timeline for monetary policy normalization following the sharp price pressures currently observed in the United States.
If the new FOMC Chair adopts a conservative and moderate tone, emphasizing the need to maintain current conditions to ensure a sustainable economic recovery, this could support further gains in risk-sensitive assets and put pressure on the US dollar.
As for intraday trading, I will primarily rely on the implementation of Scenarios No. 1 and No. 2.
Buy Signal
Scenario No. 1: Today, buying the euro can be considered if the price reaches 1.1615 (green line on the chart), with a target at 1.1663. At 1.1663, I plan to exit long positions and open short positions in the opposite direction, targeting a 30–35 point move from the entry point. Further gains in the euro are likely only if US data comes in weaker than expected.
Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher.
Scenario No. 2: I also plan to buy the euro if the 1.1591 level is tested twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and trigger an upward market reversal. In this case, a move toward 1.1615 and 1.1663 can be expected.
Sell Signal
Scenario No. 1: I plan to sell the euro after the price reaches 1.1591 (red line on the chart). The target will be 1.1547, where I intend to exit short positions and immediately open long positions in the opposite direction, targeting a 20–25 point rebound. Pressure on the pair may return today if US economic data comes in stronger than expected.
Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower.
Scenario No. 2: I also plan to sell the euro if the 1.1615 level is tested twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and trigger a downward market reversal. In this case, a decline toward 1.1591 and 1.1547 can be expected.
Chart Notes:
- Thin green line – entry price for buy positions;
- Thick green line – estimated Take Profit level or an area where profits may be manually secured, as further growth above this level is unlikely;
- Thin red line – entry price for sell positions;
- Thick red line – estimated Take Profit level or an area where profits may be manually secured, as further decline below this level is unlikely;
- MACD indicator – when entering the market, it is important to consider overbought and oversold conditions.
Important. Beginner Forex traders should exercise extreme caution when making market entry decisions. It is often best to stay out of the market before major fundamental reports are released in order to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to limit potential losses. Without stop-loss orders, you can quickly lose your entire deposit, especially if you trade large volumes without applying proper risk management.
Remember that successful trading requires a clear trading plan, such as the one outlined above. Spontaneous trading decisions based solely on current market conditions are generally a losing strategy for intraday traders.
