Trade Analysis and Advice for Trading the Euro
The price test at 1.1036 occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair fell by 30 pips, after which the pressure eased. We didn't quite reach the target level of 1.0994, so there were no other market entry points. Yesterday, data on the U.S. Consumer Price Index matched economists' forecasts, which positively affected the U.S. dollar, as it dismissed expectations of more aggressive rate cuts in the U.S. next week. Today, the euro may weaken further as the European Central Bank's decision on the key interest rate, the monetary policy report and ECB President Christine Lagarde's press conference are ahead. The fact that rates will be lowered is already priced into the market, and much now depends on the ECB's rhetoric regarding future policy. The higher the chances of two or three rate cuts this year, the cheaper the euro will be against the U.S. dollar. As for the intraday strategy, I will rely more on the realization of scenarios No. 1 and 2.
Buy Signal
Scenario No 1: Today, you can buy the euro upon reaching the price level of 1.1027 (green line on the chart) with a target of rising to 1.1064. At the 1.1064 mark, I plan to exit the market and sell the euro in the opposite direction, aiming for a movement of 30-35 pips from the entry point. Counting on the euro's rise today during the first half of the day will only be possible after a relatively cautious position from the ECB. Important! Before buying, ensure the MACD indicator is above the zero mark and is just beginning to rise.
Scenario No 2: I also plan to buy the euro today in case of two consecutive tests of the 1.1005 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth to the opposite levels of 1.1027 and 1.1064 can be expected.
Sell Signal
Scenario No 1: I plan to sell the euro after reaching the 1.1005 level (red line on the chart). The target will be the 1.0963 level, where I will exit the market and immediately buy in the opposite direction (aiming for a 20-25 pips movement in the opposite direction from the level). Pressure on the pair may return today in case of a failed attempt at a correction in the first half of the day and a dovish ECB stance. Important! Before selling, make sure the MACD indicator is below the zero mark and is just beginning to decline.
Scenario No 2: I also plan to sell the euro today in case of two consecutive tests of the 1.1027 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.1005 and 1.0963 can be expected.
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.
