Trade Review and Trading Tips for the Euro
The test of the 1.1443 level occurred when the MACD indicator had already moved significantly above the zero line, limiting the pair's upward potential. For this reason, I did not buy the euro. The second test of 1.1443 triggered Scenario #2 for selling the euro, resulting in a 20-point decline in the pair.
The euro reacted positively to the news that Germany's foreign trade balance surplus significantly exceeded economists' forecasts and increased to €19.1 billion. This indicator, which reflects the difference between the value of exported and imported goods and services, provided strong evidence of a recovery in the German economy amid global uncertainty. The larger-than-expected increase in the trade surplus was driven by several factors, including strong export demand and relatively moderate import growth.
However, heading into the U.S. session, the euro is trading cautiously due to the upcoming speech by Federal Reserve official John Williams. The event has gained particular importance following yesterday's meeting minutes, which showed that the central bank is no longer signaling potential rate cuts. If Williams confirms this stance, the dollar may receive additional support, increasing the risk of a decline in EUR/USD. A more dovish tone, on the other hand, would provide some relief for the single currency.
In addition, Initial Jobless Claims data will be released today, providing a quick assessment of whether labor market conditions are deteriorating. If the data is stronger than expected, the euro will have fewer reasons to continue rising.
Regarding the intraday strategy, I will primarily focus on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1:
Today, the euro can be bought if the price reaches the level around 1.1440 (the green line on the chart), with a target of rising toward 1.1474. At 1.1474, I plan to exit the market and also consider selling the euro in the opposite direction, expecting a move of 30–35 points from the entry point.
The euro can only be expected to rise today if economic data comes in weaker than expected. Important: Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.
Scenario #2:
I also plan to buy the euro today if there are two consecutive tests of the 1.1423 level while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger a reversal higher. A rise toward the opposite levels of 1.1440 and 1.1474 can be expected.
Sell Signal
Scenario #1:
I plan to sell the euro after the price reaches 1.1423 (the red line on the chart). The target will be 1.1397, where I plan to exit the market and immediately buy in the opposite direction, expecting a reverse move of 20–25 points from the level.
Selling pressure on the pair will return if economic data is strong. Important: Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.
Scenario #2:
I also plan to sell the euro today if there are two consecutive tests of the 1.1440 level while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a reversal lower. A decline toward the opposite levels of 1.1423 and 1.1397 can be expected.
Chart Explanation:
- Thin green line – the entry price at which the trading instrument can be bought.
- Thick green line – the expected price level where Take Profit orders can be placed or profits can be manually taken, as further growth above this level is considered unlikely.
- Thin red line – the entry price at which the trading instrument can be sold.
- Thick red line – the expected price level where Take Profit orders can be placed or profits can be manually taken, as further decline below this level is considered unlikely.
- MACD indicator – when entering the market, it is important to consider overbought and oversold zones.
Important: Beginner Forex traders should make entry decisions with great caution. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss protection, you can quickly lose your entire deposit, especially if you do not apply proper money management and trade with large volumes.
Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.
