Trade Analysis and Tips for Trading the Euro

The price test at 1.1391 coincided with the MACD indicator just beginning to move down from the zero mark, confirming the correct entry point to sell the euro. As a result, the pair dropped by 15 pips.

Yesterday, the dollar strengthened against the euro as traders bolstered their expectations regarding interest rate hikes by the Federal Reserve this year. In contrast, representatives of the European Central Bank are demonstrating a more cautious approach to tightening monetary policy. In this situation, traders tend to adjust their portfolios in favor of the dollar, anticipating that it will continue to rise against the backdrop of the expected Fed policy tightening. This exerts corresponding pressure on the euro.

Today promises to be eventful for the euro, as the market eagerly awaits the release of several key economic indicators from Germany. The most attention will be paid to the business activity index data from the IFO Institute. This comprehensive indicator, which includes assessments of both the current situation and economic expectations, is one of the most sensitive barometers of the health of the German economy. Positive results that exceed analysts' forecasts could significantly alleviate pressure on the euro, supporting its strengthening on the international stage.

In addition to the IFO data, investors and traders will closely monitor officials' speeches, particularly those of the President of the Bundesbank, Joachim Nagel. Central bank heads' speeches often carry important signals about future monetary policy, inflation prospects, and the overall outlook for economic development. Nagel's comments could influence market expectations regarding the ECB's future actions, including interest rates.

Regarding the intraday strategy, I will focus more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: You can buy euros today when the price reaches around 1.1379 (green line on the chart), with a target to reach 1.1410. At 1.1410, I plan to exit the market and sell the euro in anticipation of a 30-35 pip move from the entry point. We can only anticipate an increase in the euro after good data from the Eurozone. Important! Before buying, make sure that the MACD indicator is above the zero mark and just starting its rise from there.

Scenario No. 2: I also intend to buy euros today in the event of two consecutive price tests at 1.1360, with the MACD indicator in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect growth to the opposing levels of 1.1379 and 1.1410.

Sell Scenarios

Scenario No. 1: I plan to sell euros once the price reaches 1.1360 (the red line on the chart). The target will be 1.1336, where I intend to exit the market and buy immediately in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair today will return only if reports are very weak. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting its decline from there.

Scenario No. 2: I also plan to sell euros today in the event of two consecutive price tests at 1.1379, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.1360 and 1.1336.

What's on the Chart:

Thin green line – entry price for buying the trading instrument;

Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;

Thin red line – entry price for selling the trading instrument;

Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;

MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.

And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.