Trade analysis and trading advice for the euro

Due to low volatility in the pair, the levels I identified were not tested during the first half of the day.

Clearly, the euro is approaching the FOMC meeting with heightened uncertainty, as today's rate decision could significantly change the market balance. The market's attention is focused not only on the decision itself but also on the accompanying statement and Kevin Warsh's press conference, as these will shape expectations regarding the future path of monetary policy. The market is pricing in around a 25–30% probability of a rate hike, so the outcome of the meeting remains uncertain, and this uncertainty only increases the potential market reaction.

For the single currency, the situation is straightforward. An unexpected rate hike or hawkish signals from the Fed with a focus on inflation would strengthen the dollar and put pressure on EUR/USD, while maintaining a dovish stance would provide the euro with room for recovery. Given that the market has not reached a consensus on the outcome, any deviation from expectations could trigger a strong move, and the single currency is likely to face elevated volatility.

Regarding the intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.

Buy signal

Scenario #1: Today, I will buy the euro when the price reaches the 1.1404 level (the green line on the chart), with a target of growth towards the 1.1462 level. At 1.1462, I plan to exit the market and also sell the euro in the opposite direction, expecting a move of 30–35 points from the entry point. A rise in the euro can be expected today following a dovish Fed stance. Important: Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2: Today, I also plan to buy the euro if the price tests the 1.1388 level twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a reversal of the market upwards. Growth towards the opposite levels of 1.1404 and 1.1462 can be expected.

Sell signal

Scenario #1: I plan to sell the euro after the price reaches the 1.1388 level (the red line on the chart). The target will be the 1.1329 level, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Pressure on the pair will return following a hawkish Fed stance. Important: Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2: Today, I also plan to sell the euro if the price tests the 1.1404 level twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a reversal of the market downwards. A decline towards the opposite levels of 1.1388 and 1.1329 can be expected.

What is shown on the chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price level where Take Profit orders can be placed or profits can be manually secured, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price level where Take Profit orders can be placed or profits can be manually secured, 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 Forex traders should make trading entry decisions with great caution. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimise losses. Without stop orders, you can lose your entire account very quickly, especially if you do not use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.