Analysis of Trades and Trading Tips for the Euro
The first test of the 1.1340 price level in the second half of the day coincided with the moment when the MACD indicator had already moved significantly below the zero line, limiting the pair's downside potential. For this reason, I did not sell the euro.
The data on the increase in the University of Michigan Consumer Sentiment Index in the U.S. did not significantly strengthen the U.S. dollar. This fact alone is quite telling and raises questions about the reasons for such a restrained market reaction. Usually, positive macroeconomic data from the U.S., especially regarding consumer confidence, is perceived as a signal for dollar strengthening, reflecting optimism about the prospects of the U.S. economy and thereby increasing the attractiveness of dollar assets. However, in this case, it is possible that investors had already priced in this growth in their expectations or that other factors, such as geopolitical risks due to Trump's tariffs, inflationary risks, or expectations of continued dovish Federal Reserve policy, are exerting a more substantial influence on currency market dynamics. Technical factors should also not be discounted. Additionally, it is important to consider that although the consumer sentiment index is an important indicator, it is not the sole determinant of currency value.
Today, aside from unemployment data from Spain, no other significant economic news is expected. Although statistical data may seem uninspiring, a higher unemployment rate could momentarily weaken the euro's position, although this is unlikely. Given the lack of important fundamental data, it is better to stick to range-bound trading.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro at the entry point around 1.1392 (green line on the chart) to rise toward 1.1456. At 1.1456, I plan to exit the market and sell the euro in the opposite direction, aiming for a 30–35 pip movement from the entry point. Counting on euro growth in the first half of the day is unlikely.
Important! Before buying, ensure the MACD indicator is above the zero line and starting to rise.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the 1.1341 level when 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 1.1392 and 1.1456.
Sell Signal
Scenario #1: I plan to sell the euro after reaching the 1.1341 level (red line on the chart). The target will be 1.1284, where I plan to exit sales and immediately open purchases in the opposite direction (expecting a 20–25 pip movement from the level). Downward pressure on the pair may return at any moment.
Important! Before selling, make sure the MACD indicator is below the zero line and starting to decline from it.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the 1.1392 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 toward the opposite levels of 1.1341 and 1.1284 can be expected.
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.
