Analysis of Trades and Trading Tips for the Euro
The test of the 1.0932 price level occurred when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downside potential, especially in such a bullish market. For this reason, I did not sell the euro. However, buying on a rebound from the 1.0906 level resulted in about 30 pips of profit.
Even with promising data from the U.S. housing market, interest in the euro has not diminished. Investors appear to be cautious and are not rushing to sell the euro, considering Germany's new fiscal policy and the European Central Bank's focus on stimulating regional economic growth. At the same time, the U.S. dollar is under pressure due to concerns about a possible economic downturn, as confirmed by recent GDP and inflation data. As a result, a combination of factors—including geopolitical uncertainty due to Trump's trade policies, strong economic indicators from the Eurozone, and expectations regarding ECB policy—continue to support demand for the euro.
We expect highly significant data from the Eurozone in the first half of today, particularly the Consumer Price Index (CPI) and Core CPI. These figures will undoubtedly shape the ECB's future approach to monetary policy, which will impact the euro's exchange rate. Inflation remains the key factor influencing the central banks' decisions.
If inflation shows a sustained slowdown, the ECB may be more dovish, possibly leading to further interest rate cuts. On the other hand, if inflationary pressure remains high, the ECB will likely maintain its restrictive rhetoric and pause its monetary easing cycle.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario No. 1: Buying the euro today is possible at the 1.0937 price level (green line on the chart) with a target of 1.0967. At 1.0967, I plan to exit the market and sell the euro in the opposite direction, expecting a 30–35 pips movement from the entry point. The euro may strengthen in the first half of the day as part of the upward trend following strong data from the Eurozone. Important! Before buying, ensure the MACD indicator is above the zero mark and starting to rise.
Scenario No. 2: I also plan to buy the euro today if the price of 1.0920 is tested twice in a row while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected toward the opposite levels of 1.0937 and 1.0967.
Sell Signal
Scenario No. 1: I plan to sell the euro after reaching the 1.0920 level (red line on the chart). The target will be 1.0891, where I intend to exit the market and immediately buy in the opposite direction, expecting a movement of 20–25 pips in the opposite direction from the level. Pressure on the pair will return today in the event of a sharp drop in inflation. Important! Before selling, make sure the MACD indicator is below the zero mark and starting to decline from it.
Scenario No. 2: I also plan to sell the euro today if the price of 1.0937 is tested twice in a row while 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 can be expected toward the opposite levels of 1.0920 and 1.0891.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
