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The test of the 1.1382 price level occurred when the MACD indicator had just started moving downward from the zero line, confirming the validity of the entry point for a short position on the euro. As a result, the pair declined by 10 points.
The euro received no support, as eurozone economic data were not released and therefore did not reduce demand for the US dollar. The US currency maintained its advantage, and the pair continued to decline. The second half of the day is likely to follow the same pattern, as no US economic data are expected, while there are several Federal Reserve officials scheduled to speak. Among them, I would highlight speeches by Michelle Bowman and Lisa D. Cook, both FOMC members, as well as comments from Thomas Barkin. As usual, Federal Reserve officials will discuss their assessment of inflation, the condition of the labor market, consumer spending, and the risks they see for the economy, as well as, most importantly, how these assessments should affect interest-rate decisions. Given that interest rates have already been raised and the regulator's tone remains hawkish, traders will be looking for confirmation that the committee is prepared to continue with further tightening. Any such indications would strengthen market expectations for further tightening and, consequently, support the US dollar. In my view, the euro has limited potential for a rebound under these conditions.
As for the intraday strategy, I will focus more on the implementation of Scenarios No. 1 and No. 2.
Scenario No. 1: Today, I plan to buy the euro when the price reaches around 1.1379 (the green line on the chart), with a target of a move up to 1.1399. At 1.1399, I plan to exit the market and also open a short position on the euro, targeting a move of 30–35 points from the entry point. Any increase in the euro today should be viewed only as a correction. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.
Scenario No. 2: I also plan to buy the euro today if the price tests 1.1365 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward reversal. A rise toward the opposite levels of 1.1379 and 1.1399 can be expected.
Scenario No. 1: I plan to sell the euro after the price reaches 1.1365 (the red line on the chart). The target will be 1.1353, where I plan to exit the market and immediately open a long position, targeting a move of 20–25 points in the opposite direction from the level. Selling pressure on the pair may return at any time. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.
Scenario No. 2: I also plan to sell the euro today if the price tests 1.1379 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.1365 and 1.1353 can be expected.
Important. Beginner Forex traders should make entry decisions very carefully. Before the release of important fundamental reports, it is generally preferable to remain out of the market in order to avoid exposure to sharp exchange-rate fluctuations. If you decide to trade during news releases, always use stop orders to limit potential losses. Without stop orders, you can lose your entire trading deposit very quickly, especially if you do not use proper money management and trade large position sizes.
And remember that successful trading requires a clear trading plan, such as the one presented above. Making trading decisions spontaneously based on the current market situation is inherently an unsuccessful intraday trading strategy.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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