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Analysis of Trades and Trading Advice for the Euro
The 1.0599 level was tested when the MACD indicator had already moved significantly below the zero line. It remained in the oversold area for an extended period, which limited the pair's downward potential. For this reason, I avoided selling and instead bought euros, expecting a correction as outlined in my morning forecast. As a result, the pair rose by 25 points.
In the second half of the day, the US Consumer Price Index (CPI) data will be released, with particular attention to core inflation, which excludes food and energy prices. A rise in core inflation may strengthen the dollar and push the euro lower. Conversely, weaker inflation may drive a correction in the euro. Remarks by FOMC members Neel Kashkari and Lorie K. Logan will also be closely monitored. A hawkish tone from these speakers is likely to further strengthen the dollar. For my intraday strategy, I will focus primarily on Scenario 1, even considering the MACD indicator readings, as I anticipate strong directional movement following the data release.
Buy Signal
- Scenario 1: Buy the euro when the price reaches 1.0645 (green line on the chart), targeting 1.0681. At 1.0681, I plan to exit the market and open sell positions for a 30-35 point reversal. Significant euro growth can be anticipated if the US data is weak.Important: Before buying, ensure the MACD indicator is above the zero line and starting to rise from it.
- Scenario 2: Another buying opportunity arises if the pair retests the 1.0610 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and likely lead to a market reversal upward. A rise to 1.0645 and 1.0681 can be expected under favorable conditions.
Sell Signal
- Scenario 1: Sell the euro after it reaches 1.0610 (red line on the chart). The target will be 1.0573, where I will exit the market and immediately open buy positions for a 20-25 point reversal. Pressure on the pair is likely to resume if US inflation reports show an increase.Important: Before selling, ensure the MACD indicator is below the zero line and starting to decline from it.
- Scenario 2: Another selling opportunity arises if the pair retests 1.0645 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and likely lead to a downward market reversal. A decline to 1.0610 and 1.0573 can be expected.
On the Chart:
- Thin Green Line: Entry price for buying the trading instrument.
- Thick Green Line: Target price for setting Take Profit or manually securing profits, as further growth above this level is unlikely.
- Thin Red Line: Entry price for selling the trading instrument.
- Thick Red Line: Target price for setting Take Profit or manually securing profits, as further decline below this level is unlikely.
- MACD Indicator: Use overbought and oversold zones to assess momentum and make informed entry decisions.
Key Considerations for Beginner Traders
Novice traders in the Forex market must exercise caution when making market entry decisions. It is advisable to stay out of the market before the release of major fundamental reports to avoid sharp price swings. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you risk losing your entire deposit, particularly if you neglect money management and trade large volumes.
Remember: Successful trading requires a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation often result in suboptimal outcomes for intraday traders.
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