20.05.202608:21 Forex Analysis & Reviews: EUR/USD: Simple Trading Tips for Beginner Traders on May 20. Review of Yesterday's Forex Trades

Trade Review and Tips for Trading the Euro

The price test at 1.1612 coincided with the MACD indicator just beginning to move downward from the zero mark, confirming the correct entry point for selling euros. As a result, the pair declined by 18 pips.

Yesterday, the euro again showed a negative dynamic against the U.S. dollar. This occurred against the backdrop of traders' lost hopes for a peaceful resolution with Iran, as Donald Trump expressed. The U.S. president's words, which previously served as a catalyst for risk asset growth, now leave investors in a state of uncertainty. Fears of a potential escalation of conflict in the Middle East forced many to reassess their positions, leading to pressure on the euro and its decline to multi-month lows.

Today's publication of consumer price indices in the Eurozone and producer prices in Germany, scheduled for the first half of the day, will undoubtedly attract market participants' attention. These statistical data are key indicators of inflationary processes in Europe's largest economy and could significantly impact the future dynamics of the euro against the U.S. dollar.

The inflation figures from Germany, as the locomotive of the Eurozone, are of particular interest. If the consumer price index shows acceleration and the producer price index demonstrates sustained growth, it will be a clear signal of increasing price pressure. In such a scenario, the European Central Bank may be forced to rethink its accommodative monetary policy, which, in turn, would support the euro.

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

Buying Scenarios

Scenario No. 1: Today, euros can be bought when the price reaches around 1.1607 (green line on the chart) with a target for growth to level 1.1632. At point 1.1632, I plan to exit the market and sell euros back, anticipating a move of 30-35 pips from the entry point. Growth for the euro can only be expected after strong data from the Eurozone. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its rise from there.

Scenario No. 2: I also plan to buy euros today if the price tests 1.1593 twice in a row, with the MACD indicator in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. It is possible to expect growth toward the opposite levels of 1.1607 and 1.1632.

Selling Scenarios

Scenario No. 1: I plan to sell euros once the price reaches 1.1593 (red line on the chart). The target will be level 1.1562, where I intend to exit the market and immediately buy back in the opposite direction (anticipating a 20-25-pip move in the opposite direction from the level). Pressure on the pair may return at any moment today. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its decline from there.

Scenario No. 2: I also plan to sell euros today if two consecutive tests of the price 1.1607 occur while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. It is possible to expect a decline to opposite levels of 1.1593 and 1.1562.

What is on the Chart:

• The thin green line – entry price at which the trading instrument can be bought;
• The thick green line – approximate price where take profit can be set or to realize profit, as further growth above this level is unlikely;
• The thin red line – entry price at which the trading instrument can be sold;
• The thick red line – approximate price where take profit can be set or to realize profit, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions very cautiously. It is best to stay out of the market before important fundamental reports to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade in large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making impulsive trading decisions based on the current market situation is fundamentally a losing strategy for an intraday trader.