Trade Analysis and Tips for Trading the European Currency

The test of the 1.1442 price level occurred when the MACD indicator had just begun moving upward from the zero mark, confirming a correct entry point for buying the euro. As a result, the pair rose to the 1.1482 level.

A market lacking clear driving forces reacted technically, leading to a minor correction in the EUR/USD pair at the beginning of the week. However, despite the temporary improvement, the fundamental challenges facing the Eurozone, including slowing economic growth and the high risk of rising inflation, remain relevant. Therefore, any recovery in the euro is likely to be short-lived.

Macroeconomic data will be released later, including changes in industrial production, manufacturing output, as well as the Empire Manufacturing Index and the NAHB Housing Market Index for the United States. These upcoming indicators are expected to have a significant impact on market sentiment. Data on changes in industrial production and manufacturing output will provide insight into the condition of the real sector of the economy. The Empire Manufacturing Index, published by the Federal Reserve Bank of New York, is traditionally one of the earliest indicators of business activity in the U.S. manufacturing sector for the current month. Positive readings will help the dollar recover part of the positions lost earlier in the morning.

As for the intraday strategy, I will rely more on the implementation of Scenario No. 1 and Scenario No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches the 1.1487 level (green line on the chart) with a target of 1.1513. At 1.1513, 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 after weak U.S. statistics.

Important: Before buying, make sure that the MACD indicator is above the zero mark and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1467 price level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upward. Growth toward the opposite levels of 1.1487 and 1.1513 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1467 level (red line on the chart). The target will be 1.1439, where I plan to exit the market and immediately buy in the opposite direction, expecting a 20–25 point move from the level. Pressure on the pair may return at any moment.

Important: Before selling, make sure that the MACD indicator is below the zero mark and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today if there are two consecutive tests of the 1.1487 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal of the market downward. A decline toward the opposite levels of 1.1467 and 1.1439 can be expected.

What is shown on the chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – the expected level where Take Profit orders can be placed or profits can be locked in manually, since further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – the expected level where Take Profit orders can be placed or profits can be locked in manually, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner traders in the Forex market should be very cautious when making decisions about entering the market. Before the release of major fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize potential losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade with large volumes.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based solely on the current market situation are an inherently losing strategy for an intraday trader.