Trade Analysis and Trading Advice for the Euro

The price test at 1.1579 occurred at a moment when the MACD indicator had just begun moving upward from the zero line, confirming a valid entry point for buying the euro in continuation of yesterday's upward movement. However, no major market rally followed.

Inflation data from Germany and Italy matched economists' forecasts, which limited euro volatility. In Germany, the Consumer Price Index declined, while in Italy it increased. The market reacted with restrained optimism. Moderate buying interest in the euro was observed, allowing it to recover only part of its morning losses.

Looking ahead, we will see the University of Michigan Consumer Sentiment Index. High readings of this index typically signal that households are more willing to spend, invest, and take financial risks, which is positive for both the economy and the U.S. dollar. Conversely, low readings may indicate slowing consumer spending, a greater tendency to save, and a more cautious financial approach. In addition to the sentiment index, close attention will be paid to inflation expectations. If expectations for rising prices remain elevated, this may encourage consumers to bring forward purchases, which paradoxically can further increase inflationary pressure.

For the intraday strategy, I will rely more on scenarios #1 and #2.

Buy Signal

Scenario #1:

Today, euro purchases can be considered at a price around 1.1591 (green line on the chart), targeting growth toward 1.1639. At 1.1639, I plan to exit the market and also consider selling in the opposite direction, targeting a 30–35 point move from the entry point. Further euro growth is only likely in the case of weak U.S. data. Important: before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2:

Buying the euro is also considered in the case of two consecutive tests of 1.1571, when the MACD is in oversold territory. This would limit downward potential and trigger a reversal upward. In this case, a move toward 1.1591 and 1.1639 can be expected.

Sell Signal

Scenario #1:

Selling the euro is planned after reaching 1.1571 (red line on the chart). The target is 1.1510, where I plan to exit and immediately consider buying in the opposite direction (expecting a 20–25 point reversal from that level). Pressure on the pair may increase in the case of a sharp rise in inflation. Important: before selling, ensure that the MACD is below the zero line and has just started declining from it.

Scenario #2:

Selling the euro is also considered if there are two consecutive tests of 1.1591, when the MACD is in overbought territory. This would limit upward potential and trigger a reversal downward. A decline toward 1.1571 and 1.1510 can be expected.

Chart Explanation

• Thin green line – entry price for buying the trading instrument
• Thick green line – expected take-profit level or manual profit-taking area, as further upside above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – expected take-profit level or manual profit-taking area, as further downside below this level is unlikely
• MACD indicator – trading decisions should consider overbought and oversold zones

Important Notice

Beginner Forex traders should approach market entry decisions with extreme caution. Before major fundamental releases, it is best to stay out of the market to avoid sharp volatility. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can lose your entire deposit very quickly, especially if risk management is not applied and large volumes are traded.

Remember that successful trading requires a clear trading plan, similar to the one outlined above. Making spontaneous trading decisions based on current market conditions is inherently a losing intraday strategy.