Trade Analysis and Tips for Trading the Euro
The price test of 1.1117 occurred when the MACD indicator had moved significantly downward from the zero mark, limiting the pair's bearish potential. For this reason, I did not sell the euro. Shortly after, when the MACD was in the oversold area, the second test of this price level led to the implementation of Scenario No. 2 for buying the euro. As a result, the pair rose by more than 20 pips. The absence of US data caused the euro to fall in the afternoon, but the significant drawdown and attractive prices prevented buyers of risky assets from being indifferent, allowing the pair to correct.
This morning, we expect data on Spain's Consumer Price Index, Germany's CPI, and the Eurozone's Consumer Confidence Indicator. However, traders will likely focus more on the speeches by European Central Bank Executive Board members Philip Lane and Joachim Nagel. Excessively dovish rhetoric from the central bank's representatives could lead to a new euro sell-off and strengthen the US dollar. For the intraday strategy, I will rely more on scenarios No. 1 and 2.
Buy Signal
Scenario No 1: Today, you can buy the euro when the price reaches 1.1145, plotted by the green line on the chart, with the goal of rising to 1.1184. At 1.1184, I plan to exit the market and sell the euro in the opposite direction, counting on a movement of 30-35 pips from the entry point. It will be possible to count on the euro's growth today in the first half of the day after good data on the Eurozone. Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario No 2: I am also going to buy the euro today in case of two consecutive tests of 1.1126 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse market upturn. We can expect growth to the opposite levels of 1.1145 and 1.1184.
Sell Signal
Scenario No 1: I plan to sell the euro after reaching the level of 1.1126, plotted by the red line on the chart. The target will be the level of 1.1090, where I will exit the market and buy immediately in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on EUR/USD will return today if there is a failed attempt at correction in the first half of the day. Important: Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario No 2: I am also going to sell the euro today in case of two consecutive price tests of 1.1145 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse market downturn. One can expect a decline to the opposite levels of 1.1126 and 1.1090.
What's on the Chart:
Thin green line: the entry price at which you can buy the trading instrument.
Thick green line: the estimated price at which you can set Take Profit or manually close positions, as further growth above this level is unlikely.
Thin red line: the entry price at which you can sell the trading instrument.
Thick red line: an estimated price at which you can place Take Profit or manually close positions, 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: Novice traders in the forex market need to be very careful when making decisions about entering the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade in large volumes.
Remember, a clear trading plan, like the one I've outlined, is essential for successful trading. Making impulsive decisions based on the current market situation is a losing strategy for novice intraday traders.
