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Analysis of Trades and Tips for Trading the Euro
The test of the 1.0879 price level coincided with the MACD indicator moving significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy it and was correct. The pair rose by only about 10 points, and then it stopped. Yesterday's PMI data for the Eurozone services sector and the composite index were disappointing, leading to a decline in the pair. Strong similar reports from the US were why the euro did not continue to rise during the American session. But today, all attention will be focused on the ECB's decision on the main interest rate, which with 99.99% certainty will be lowered by a quarter point, as well as on the monetary policy report and the press conference of ECB President Christine Lagarde. If it becomes clear that ECB members are frightened by the recent rise in inflation, the euro is likely to continue to grow, as rate cuts will be off the table for the near future. If the market is surprised by the regulator's dovish stance, nothing will likely prevent a fall in EUR/USD. Regarding the intraday strategy, I will rely more on scenarios #1 and #2.
Buy Signal
Scenario #1: Today, buying the euro is possible when the price reaches around 1.0897 (green line on the chart), with a target of rising to the 1.0946 level. At the 1.0946 point, I plan to exit the market and sell the euro in the opposite direction, expecting a move of 30-35 points from the entry point. Counting on the euro's growth today is only possible after a very hawkish ECB stance on future interest rate dynamics. Important! Before buying, ensure that the MACD indicator is above the zero mark and only starting its rise from it.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the 1.0870 price level when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a market reversal upwards. A rise to the opposite levels of 1.0897 and 1.0946 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after reaching the 1.0870 level (red line on the chart). The target will be the 1.0829 level. I plan to exit the market and buy immediately in the opposite direction (expecting a move of 20-25 points in the opposite direction from the level). Pressure on the pair will increase in the case of unsuccessful consolidation around the daily high and a dovish ECB stance. Important! Before selling, ensure that the MACD indicator is below the zero mark and only starting its decline from it.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the 1.0897 price level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline to the opposite levels of 1.0870 and 1.0829 can be expected.
What's on the Chart:
Important: Beginner Forex traders should be cautious when making market entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid sudden price swings. 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 do not use money management and trade with large volumes.
Successful trading requires a clear plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.
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