Analysis of Trades and Trading Tips for the Euro

The price test at 1.1620 coincided with the moment when the MACD indicator was starting to move up from the zero mark, confirming the correct entry point for buying euros. As a result, the pair rose to the target level of 1.1638.

The sharp weakness of the dollar was the main surprise of the day, especially against the backdrop of the minutes from the July Federal Reserve meeting being noticeably more hawkish than the decision itself. The central bank held the rate at 3.75% for the fifth consecutive time; however, the vote revealed divisions, as three committee members, Hammack, Kashkari, and Logan, insisted on a 25-basis-point hike. Moreover, many participants believed that tightening would likely be necessary if inflation does not begin to decline consistently, and some advocates of a pause acknowledged that a hike now would alleviate the need for more drastic measures later. Nevertheless, this entire hawkish message was overshadowed by the US Treasury's decision to increase the bond buyback. Such a move increases demand for debt securities and injects liquidity into the market, thereby lowering yields and undermining the dollar's appeal. As a result, the American currency sharply declined despite growing calls within the Fed for tighter policy.

Today, the euro enters the first half of the day with an eye on the publication of the German producer price index and the Bundesbank's monthly report. Producer prices indicate how much products are becoming more expensive even before they hit the shelves and are therefore considered a leading indicator of inflation. The Bundesbank's report traditionally reveals the central bank's view on inflation and the state of the economy. Both events could adjust expectations for European Central Bank rates and set the direction of the single currency.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: Today, euros can be bought when the price reaches around 1.1684 (green line on the chart), with a target to reach 1.1714. At 1.1714, I plan to exit the market and also sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. A rise in the euro can be expected to continue the trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its rise from it.

Scenario #2: I also plan to buy euros today in case of two consecutive tests of the price 1.1671 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. A rise to the opposite levels of 1.1684 and 1.1714 can be expected.

Selling Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1671 (the red line on the chart). The target will be 1.1647, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from that level). Pressure on the pair today will return with weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.

Scenario #2: I also plan to sell euros today in case of two consecutive tests of the price 1.1684 when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downwards. A decline to the opposite levels of 1.1671 and 1.1647 can be expected.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.