Trade Analysis and Tips for Trading the European Currency

The price test at 1.1583 occurred when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point for buying the euro. As a result, the pair only rose by 5 pips.

Yesterday's data did not provide an advantage to the dollar, nor did they allow the euro to extend its gains. On the one hand, the investment segment is showing strength, with equipment shipments rising 6.6% year-on-year amid the artificial intelligence boom. On the other hand, consumer goods production fell by 1.8% and was the only category in negative territory year-on-year. In comparison, overall industrial production growth was limited to a modest 0.2% month-on-month. Capacity utilization remained at 76.3%, below the long-term norm of 79.4%, indicating overheating is not an issue.

Today, the euro enters the first half of the day with attention focused on a busy European agenda, with the key item being the Eurozone consumer inflation report. Inflation data is considered one of the key indicators for the euro, as it determines the trajectory of the European Central Bank's rate policy, and the market primarily reacts to deviations of the actual numbers from forecasts. The current account balance and Christine Lagarde's speech will also complement the picture, as any hint from her regarding the central bank's next steps could sharply shift the pair. For the euro, the outlook has become favorable on strong data. Good inflation figures will lead to a new wave of euro growth, strengthening expectations for a hawkish ECB and giving the EUR/USD pair upward momentum.

Regarding the intraday strategy, I will focus more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

• Scenario No. 1: Today, I can buy euros when the price reaches around 1.1596 (the green line on the chart), targeting a rise to 1.1613. At 1.1613, I plan to exit the market and sell the euro in the opposite direction, expecting a move of 30-35 pips from the entry point. The growth of the euro can be expected to follow the trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting its rise from it.
• Scenario No. 2: I also plan to buy euros today in the event of two consecutive tests of 1.1581 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 1.1596 and 1.1613.

Sell Scenarios

• Scenario No. 1: I plan to sell euros once the price reaches 1.1581 (the red line on the chart). The target will be 1.1566, where I intend to exit my short positions and immediately buy in the opposite direction, expecting movement of 20-25 pips in the opposite direction from the level. Pressure on the pair today will return if weak data are released. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.
• Scenario No. 2: I also plan to sell euros today in the event of two consecutive tests of 1.1596 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. A decline can be expected towards the opposite levels of 1.1581 and 1.1566.

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.