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Trade analysis and tips for trading the European currency
The test of the price at 1.0787 in the first half of the day occurred at a moment when the MACD indicator had risen significantly above the zero mark, limiting further upward potential. For this reason, I did not buy the euro. The pair didn't quite reach the retest of 1.0787 - it missed by a couple of points, so scenario #2 couldn't be realized. The lack of Eurozone statistics affected the market and its volatility. But in the second half of the day, we are expecting some very interesting figures on the University of Michigan Consumer Sentiment Index and inflation expectations from the University of Michigan. Regardless of the data outcome, the dollar will likely react with growth, increasing pressure on the euro. For this reason, I will expect a more active session with the formation of suitable entry points. As for the intraday strategy, I plan to act based on the realization of scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches around 1.0787 (green line on the chart) to rise to the level of 1.0816. At point 1.0816, I will exit the market and also sell the euro in the opposite direction, targeting a movement of 30-35 points from the entry point. Euro growth can be expected today, but only within a sideways channel. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just beginning to rise from it.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the price at 1.0775 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal of the market upwards. Expect growth towards the opposite levels of 1.0787 and 1.0816.
Sell Signal
Scenario #1: I will sell the euro after reaching 1.0775 (red line on the chart). The target will be the level of 1.0745, where I plan to exit the market and buy the euro immediately in the opposite direction (targeting a movement of 20-25 points in the opposite direction from the level). Pressure on the pair will return in case of a lack of buyer activity near the daily high and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and just starting its decline from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the price at 1.0787 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downwards. Expect a decrease towards the opposite levels of 1.0775 and 1.0745.
On the chart:
Thin green line - entry price, at which the trading instrument can be bought.
Thick green line - the expected price, where you can set Take Profit or manually take profits, as further growth above this level is unlikely.
Thin red line - entry price at which the trading instrument can be sold.
Thick red line - the expected price, where you can set Take Profit or manually take profits, as further decline below this level is unlikely.
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 decisions to enter the market. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. You must set stop orders to avoid losing your entire deposit, especially if you don't use money management and trade large volumes.
And remember that successful trading requires a clear trading plan, like the one I presented above. Spontaneous trading decisions based on the current market situation are 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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