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The test of the 1.0305 price level in the second half of the day coincided with the MACD indicator starting to move upward from the zero mark, confirming a valid entry point for buying the euro. As a result, the pair gained over 20 pips.
The Federal Reserve's minutes from December, released yesterday, supported the dollar against several risk assets. It is clear that the Fed believes it may be appropriate to slow the pace of rate cuts. Many policymakers think that while rate cuts should continue, they should do so at a more moderate pace. Fed members also expressed concerns about the impact of Trump's policies on inflation, indicating that slower rate reductions are warranted due to the associated uncertainties. These factors ultimately benefited the dollar.
Today, the weakness of the euro may worsen due to growing concerns about slowing economic growth in Germany. Investors will be evaluating the risks of further monetary easing by the European Central Bank (ECB), especially in light of declining inflation and deteriorating macroeconomic data. If the Eurozone's retail sales and German industrial production figures fall short of expectations, it could put additional pressure on the euro. Moreover, the market will closely monitor statements from ECB representatives, as these may offer insights into the central bank's next steps.
For intraday strategies, I will focus primarily on Scenarios #1 and #2.
Scenario #1: Today, I plan to buy the euro upon reaching the 1.0317 price level (green line on the chart) with a target of 1.0354. At 1.0354, I plan to exit the market and sell the euro in the opposite direction, targeting a 30-35-pip movement from the entry point. A euro rally in the first half of the day can be expected only with positive data. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0295 level while the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to an upward market reversal. A rise toward the 1.0317 and 1.0354 levels can be expected.
Scenario #1: I plan to sell the euro after reaching the 1.0295 level (red line on the chart). The target will be 1.0262, where I will exit the market and immediately buy in the opposite direction, targeting a 20-25 pip movement from the level. Pressure on the pair could resume at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.
Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.0317 level while the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a market reversal downward. A decline toward the 1.0295 and 1.0262 levels can be expected.
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