Analysis of Trades and Trading Tips for the Euro
The price test at 1.0787 occurred at a moment when the MACD indicator had just begun to move upward from the zero mark. This confirmed a correct entry point for buying the euro, which resulted in a rise toward the target level of 1.0815.
Despite the strong growth of the euro, it's too early to relax. The rise was primarily driven by relatively muted U.S. data and inflation figures. However, it's worth noting that the data only reflect one month, making it premature to talk about a long-term trend. From now on, market participants will be watching closely for further signals from the Federal Reserve and monitoring the progress of trade negotiations between the U.S. and several partners facing new tariffs. In the coming months, the key factor influencing U.S. inflation will be the price dynamics of imported goods. If trade tariffs continue to rise, the costs will inevitably be passed on to consumers, accelerating inflation.
Germany's retail sales and consumer price index (CPI) figures are due today. These data points are important because they help assess current consumer demand and inflationary pressures. A decline in German retail sales could indicate a weakening economy, while a rise in CPI would point to stronger inflation. Both outcomes could weigh negatively on the euro and influence ECB monetary policy. The ECB may reconsider its intention to cut interest rates if inflation remains high.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Signal
Scenario #1: Buy the euro today upon reaching the entry point at 1.0848 (green line on the chart) with a target of 1.0885. At 1.0885, I plan to exit the market and open short positions in the opposite direction, expecting a move of 30–35 pips from the entry point. A bullish outlook for the euro in the first half of the day is valid only if German and Italian data are substantial. Important: Before buying, ensure the MACD indicator is above the zero line and starting to rise.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of 1.0820 while MACD is in oversold territory. This will limit the downside potential and trigger a reversal to the upside. A rise toward the opposite levels, 1.0848 and 1.0885, can be expected.
Sell Signal
Scenario #1: Sell the euro after it reaches 1.0820 (red line on the chart). The target will be 1.0772, where I plan to exit the market and immediately open long positions in the opposite direction (expecting a 20–25 pip bounce). Selling pressure is likely to return in case of weak data. Important: Before selling, make sure the MACD indicator is below the zero line and just beginning to decline.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of 1.0848 while MACD is in overbought territory. This will limit the upside potential and trigger a reversal downward. A decline toward the opposite levels, 1.0820 and 1.0772, can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
