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Trade Review and Trading Advice for the Euro
The price test at 1.1632 occurred at a moment when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.
No notable activity occurred during the first half of the day, so we will now shift attention to the U.S. goods trade balance data, the Chicago PMI index, and the speech by FOMC member Michelle Bowman. These macroeconomic indicators and Federal Reserve officials' remarks play a key role in shaping market expectations regarding future monetary policy, inflation trends, and consequently the U.S. dollar's direction.
The goods trade balance reflects the difference between exports and imports. The Chicago PMI, also known as the Chicago Business Activity Index, is a leading indicator of manufacturing activity in one of the key industrial regions of the United States. An increase in this index typically signals accelerating economic growth and may be interpreted as a positive signal for the U.S. economy, potentially supporting the dollar toward the end of the week. A decline, in contrast, may indicate a slowdown in activity and put pressure on the national currency.
Bowman's remarks regarding inflation, employment, and economic growth will also influence market expectations regarding the timing and scale of interest rate hikes or cuts, which will directly affect the U.S. dollar's performance.
Regarding the intraday strategy, I will primarily rely on scenarios No. 1 and No. 2.
BUY SIGNAL
Scenario No. 1: Today, euro purchases may be considered at a price around 1.1657 (green line on the chart), targeting a move toward 1.1705. At 1.1705, I plan to exit the market and consider selling in the opposite direction, expecting a reversal of 30–35 points from the entry point. Euro growth today can only be expected on the back of strong positive news. Important: before entering a buy trade, ensure that the MACD indicator is above the zero line and has just started rising from it.
Scenario No. 2: I also plan to buy the euro if there are two consecutive tests of the 1.1629 level while the MACD is in oversold territory. This would limit downward potential and trigger an upward reversal. A move toward the opposite levels of 1.1657 and 1.1705 can be expected.
SELL SIGNAL
Scenario No. 1: I plan to sell the euro after reaching the 1.1629 level (red line on the chart). The target is 1.1589, where I will exit the market and immediately consider buying in the opposite direction (expecting a 20–25 point rebound). Pressure on the pair today may return if strong U.S. data is released. Important: before selling, ensure that the MACD indicator is below the zero line and has just started declining from it.
Scenario No. 2: I also plan to sell the euro if there are two consecutive tests of the 1.1657 level while the MACD is in overbought territory. This would limit upward potential and trigger a downward reversal. A decline toward 1.1629 and 1.1589 can be expected.
What is shown on the chart:
Important: Beginner Forex traders should approach market entry decisions with caution. Before major fundamental data releases, it is best to stay out of the market to avoid sharp volatility. If you choose to trade during news releases, always place stop-loss orders to minimize losses. Without stop-losses, you may quickly lose your entire deposit, especially if proper risk management is not used and trading volumes are excessive.
Remember that successful trading requires a clear trading plan, similar to the one outlined above. Making spontaneous trading decisions based on current market conditions is inherently 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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