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The test of the price at 1.1745 occurred when the MACD indicator had moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the euro. The second test at 1.1745 allowed the implementation of Scenario #2, which called for selling the euro, resulting in a 10-pip decline in the pair. By the middle of the American session, another test of 1.1745 coincided with the MACD movement starting to rise from the zero mark, allowing for the entry into long positions. As a result, the pair rose by more than 40 pips.
Fears regarding a potential government shutdown in the U.S. led to the dollar's collapse. Disagreements in Congress over funding for the Department of Homeland Security sparked a sharp budget dispute between the Democratic and Republican parties. Increased investor anxiety over political uncertainty has led to a noticeable weakening of the dollar against key global currencies. Many economists warn of the negative impact of a shutdown on the U.S. economy, which was observed last autumn.
In addition to these risks, today, the German IFO business climate index data may push the euro higher, as it includes assessments of the current situation and economic expectations for Germany. Positive IFO values can support the euro, reflecting optimistic sentiments in the business environment and the likelihood of economic growth. The President of the Bundesbank's speech is also expected to influence currency trading. Investors will closely analyze his statements regarding inflation, monetary policy, and economic growth prospects. Traders should remember that the market reaction to these events can be ambiguous. Even if the IFO numbers exceed forecasts, the euro may not strengthen if the Bundesbank head shows restraint in his comments.
Regarding the intraday strategy, I will rely more on implementing Scenarios #1 and #2.
Scenario #1: Today, I plan to buy the euro at the entry price around 1.1869 (green line on the chart), with a target for growth to 1.1892 (thicker green line on the chart). At the 1.1892 level, I plan to exit the market and sell immediately on the rebound (aiming for a 30-35-pip move in the opposite direction from the level). Growth in the euro can only be expected after favorable data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the price at 1.1850 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upwards. An increase can be expected towards the opposing levels of 1.1869 and 1.1892.
Scenario #1: I plan to sell the euro today after it reaches 1.1850 (red line on the chart). The target will be the level of 1.1829, where I intend to exit the market and immediately buy in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair may return today with weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from there.
Scenario #2: I also plan to sell the euro today if the price tests 1.1869 twice in a row while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline can be expected to the opposing levels of 1.1850 and 1.1829.
The thin green line represents the entry price at which one can buy the trading instrument;
The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;
The thin red line represents the entry price at which one can sell the trading instrument;
The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;
The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.
Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price 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 do not use money management and trade large volumes.
And remember, for successful trading, it is essential to have a clear trading plan, like the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
¡Los informes analíticos de InstaForex lo mantendrá bien informado de las tendencias del mercado! Al ser un cliente de InstaForex, se le proporciona una gran cantidad de servicios gratuitos para una operación eficiente.
