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The first test of 1.0469 in the first half of the day coincided with a moment when the MACD indicator had already moved significantly above the zero mark, which limited the upward potential for the euro. For this reason, I did not buy the euro. The second test of 1.0469 shortly afterward, with MACD in the overbought zone, allowed Scenario #2 for selling to play out. However, after a 10-point decline, selling pressure subsided.
A series of positive economic reports from Germany and the Eurozone helped the euro hold its ground, though it failed to trigger a significant rally. Traders are likely focused on the US-Russia negotiations on Ukraine, as the muted market reaction to macroeconomic data suggests. In the short term, EUR/USD dynamics will depend on geopolitical developments and central bank rhetoric. If progress is made in the Ukraine talks, euro buying could resume.
In the second half of the day, the Empire Manufacturing Index and the NAHB Housing Market Index will be released. The session will conclude with a speech from FOMC member Michael S. Barr. These indicators will provide additional insight into the US economy. The Empire Manufacturing Index will assess industrial activity in New York State, while the NAHB Housing Market Index will reflect builder confidence in the housing market, a key driver of economic growth. Barr's speech will be particularly significant, as his comments may shed light on the FOMC's stance on monetary policy.
For intraday trading, I will focus on Scenario #1 and Scenario #2.
Scenario #1: Buy EUR/USD at 1.0473, targeting 1.0501. At 1.0501, I plan to exit long positions and sell the euro, expecting a 30-35 point pullback. Euro appreciation today will depend on positive news. Important: Before buying, ensure that the MACD indicator is above zero and just beginning to rise.
Scenario #2: Buy EUR/USD if 1.0455 is tested twice, with MACD in the oversold zone. This will limit downward potential and trigger a market reversal upward. The expected target levels are 1.0473 and 1.0501.
Sell Signal
Scenario #1: Sell EUR/USD at 1.0455, targeting 1.0426. At 1.0426, I will exit short positions and buy for a 20-25 point pullback. Selling pressure could return at any moment. Important: Before selling, ensure that the MACD indicator is below zero and just beginning to decline.
Scenario #2: Sell EUR/USD if 1.0473 is tested twice, with MACD in the overbought zone. This will limit upward potential and cause a market reversal downward. The expected targets are 1.0455 and 1.0426.
New traders in the Forex market should exercise caution when making trade entries. Before major economic reports, it is best to stay out of the market to avoid unexpected volatility. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss protection, a trader can quickly deplete their account, especially when trading large volumes without risk management.
For successful trading, a clear trading plan is essential, similar to the one outlined above. Making impulsive trading decisions based on short-term market movements is a losing strategy for intraday traders.
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