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Trade analysis and tips for trading the European currency
The test of the price at 1.0735 in the first half of the day coincided with a moment when the MACD indicator had descended significantly from the zero mark, limiting further downward potential. For this reason, I did not sell the euro, and it turned out to be correct. Against the backdrop of low trading volume and the absence of any statistics on the eurozone, it wasn't easy to expect significant market movements. The second half of the day may proceed under the same "sauce," as US data is unlikely to change anything. Figures on initial jobless claims in the US are unlikely to influence the market balance. However, if the reports exceed economists' forecasts, pressure on the euro will likely increase, and the dollar will continue to strengthen. The British pound may also influence euro buyers, as a sharp decline in the pound will exert pressure on EUR/USD. As for the intraday strategy, I plan to act based on the implementation of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches around 1.0742 (green line on the chart), with a target of rising to the level of 1.0774. At 1.0774, I will exit the market and also sell the euro in the opposite direction, aiming for a movement of 30-35 pips from the entry point. Today, the rise of the euro can be expected only within the range of a sideways channel. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the price at 1.0725 when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to a reversal of the market upward. Expect a rise to the opposite levels of 1.0742 and 1.0774.
Sell Signal
Scenario #1: I will sell the euro after reaching the level of 1.0725 (red line on the chart). The target will be the level of 1.0697, where I plan to exit the market and buy the euro immediately in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair will return in case of a lack of buyer activity around the daily high and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the price at 1.0742 when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a reversal of the market downward. Expect a decline to the opposite levels of 1.0725 and 1.0697.
What's on the chart:
Thin green line – entry price, at which you can buy the trading instrument.
Thick green line – the expected price where you can set Take Profit or manually take profits, as further growth beyond this level is unlikely.
Thin red line – entry price, at which you can sell the trading instrument.
Thick red line – the expected price where you can set Take Profit or manually take profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to follow overbought and oversold zones.
Important. Beginner traders in the forex market need to be very cautious when making decisions to enter the market. Before important fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade with large volumes.
And remember, successful trading requires a clear trading plan similar to the one I presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.
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