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A price test at 1.1186 occurred as the MACD indicator began moving down from the zero line, confirming a valid entry point to sell the euro. As a result, the pair plunged more than 80 pips.
EUR/USD came under heavy pressure yesterday but fully retraced today's drop. The trigger was US September inflation. Headline CPI rose 0.6% month-on-month after 0.4% in August and 3.7% year-on-year after 3.4%, matching consensus. The market reacted not to the headline but to the details — gasoline jumped 9.1% and accounted for more than half of the monthly rise. The core measure surprised on the upside: +0.3% month-on-month versus +0.2% expected, and 2.6% year-on-year versus 2.4% previously. That divergence matters because core inflation reflects pressure that won't disappear if oil prices fall. For the Federal Reserve, the implication is clear: an October hike remains unlikely, but a December move is almost priced in. For the euro, a different consideration matters more.
Already today, after a sharp decline in US Treasury yields, the dollar has given back yesterday's advantage and EUR/USD has returned to pre-release levels.
EUR/USD is moving higher today, and the question is whether European data will support it. In the first half of the day, the market will see Eurozone industrial production and then Italy's CPI. Industrial production measures factory output, and an increase signals strong demand. Italian CPI shows how prices are rising in Italy and therefore affects European Central Bank rate expectations. In my view, both releases matter primarily together: strong industrial production combined with high inflation is the most favorable combo for the euro because it lets the central bank keep tightening without fearing a sharp economic slowdown.
For intraday strategy, I will mainly rely on Scenarios 1 and 2.
Scenario 1: Buy the euro today near 1.1215 (green line on the chart), targeting 1.1243. I plan to exit at 1.1243 and also sell EUR there, aiming for a 30–35 pip retracement from the entry. Expect euro gains today only after strong European data. Important: before buying, ensure MACD is above zero and only beginning to rise from it.
Scenario 2: Also consider buying if price tests 1.1197 twice while MACD is in the oversold area. That would limit downside potential and trigger an upward reversal. Expect moves to 1.1215 and 1.1243.
Scenario 1: Plan to sell the euro after it reaches 1.1197 (red line on the chart). Target 1.1174, where I plan to exit short positions and immediately buy in the opposite direction (aiming for a 20–25 pip reversal from that level). Strong renewed pressure on the pair can return at any time. Important: before selling, ensure MACD is below zero and only beginning to fall from it.
Scenario 2: Also consider selling if price tests 1.1215 twice while MACD is in the overbought area. That would limit upside potential and trigger a reversal downward. Expect declines toward 1.1197 and 1.1174.
Thin green line — entry price where you can buy the instrument.
Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.
Thin red line — entry price where you can sell the instrument.
Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.
Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.
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