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The test of the price level at 1.1665 coincided with the MACD indicator already having moved significantly above the zero mark, which limited the pair's upside potential. For this reason, I did not buy euros.
The European currency strengthened its position, supported by positive economic news: a stable rise in German industry and encouraging GDP figures for the Eurozone instilled optimism in the investment environment. German industry reported a noticeable increase in orders, indicating a recovery in purchasing activity and strengthening in the manufacturing sector towards year-end. This factor had a significant positive impact on market sentiment, reinforcing confidence in Germany's economic recovery.
At the same time, the released GDP data for the Eurozone countries was better than expected, confirming the trend of sustained economic growth. GDP growth is an important indicator reflecting the overall state of the economy, and its positive dynamics made the euro more attractive to investors.
In the afternoon, investors will focus on the release of the Consumer Price Index (CPI) and personal income and spending in the US. Economists often closely analyze the dynamics of personal consumer expenditures to determine whether price growth is slowing, which could, in turn, affect future Federal Reserve policy regarding interest rates. If the index declines, the dollar may respond with further decline. Additionally, the University of Michigan Consumer Sentiment Index is an important indicator of consumer sentiment, as it reflects consumer confidence in the government's ability to control prices. Therefore, today's reports represent a broad spectrum of economic information that could significantly alter investors' views on the current situation and the prospects for US economic growth.
Regarding the intraday strategy, I will focus on implementing Scenarios 1 and 2.
Scenario No. 1: I plan to buy euros today upon reaching an entry price around 1.1662 (green line on the chart), targeting a move to 1.1700. At 1.1700, I plan to exit the market and also sell euros immediately on the bounce, aiming for a movement of 30-35 pips from the entry point. A strong growth expectation for the euro can only materialize after weak US data. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario No. 2: I also plan to buy euros today if there are two consecutive tests of the price at 1.1646 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. We can expect growth toward opposing levels of 1.1662 and 1.1700.
Scenario No. 1: I plan to sell euros once the pair reaches 1.1646 (red line on the chart). The target will be the level of 1.1614, where I intend to exit the market and buy immediately in the opposite direction (aiming for a movement of 20-25 pips in the opposite direction from that level). Pressure on the pair will return today with good data. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.
Scenario No. 2: I also plan to sell euros today if there are two consecutive tests of the 1.1662 price level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. We can expect a decline to the opposing levels of 1.1646 and 1.1614.
Beginner traders in the Forex market need to be very cautious when making decisions to enter the market. It is best to stay out of the market before the release of significant fundamental reports to avoid sharp fluctuations in the exchange rate. 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.
Remember that successful trading requires a clear trading plan, like the one presented above. Impulsive trading decisions based on the current market situation are fundamentally a losing strategy for intraday traders.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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