Analysis of Trades and Trading Tips for the European Currency

The test of the 1.1215 level occurred when the MACD indicator had just started moving upward from the zero line, confirming a valid entry point for buying the euro. As a result, the pair rose toward the target level of 1.1244.

The euro continues to recover after Monday's sharp decline, and the most notable aspect of this move is that it was not driven by economic data. Eurozone retail sales data for August were weak. The volume increased by 0.1% m/m after declining by 0.6% in July, while the increase in the EU was also 0.1% following a 0.5% decline. On a year-over-year basis, the figures were 0.8% and 1.2%, respectively. On another day, these figures would have raised concerns about weak consumer demand, but today they received almost no market reaction. The reason is straightforward. The market is focused on bond markets rather than retail sales. European bond yields moved away from their highs, while France and Italy recorded the strongest rebound among the major economies. Following yesterday's widening of spreads and concerns about political instability in Paris, this improvement is significant. For the euro, this is more important than retail sales because fiscal concerns were one of the factors behind the currency's decline, and their easing is supporting renewed demand for the euro.

However, the evening session could provide several important developments for the euro. The currency is approaching the U.S. data releases after recovering from a 17-month low, while the main current risk is coming not from Europe but from the United States. Weekly ADP data, the RCM/TIPP index, and speeches by Bowman and Schmid are expected. However, these events are unlikely to change expectations regarding how long the Federal Reserve is prepared to keep the interest rate at 3.75–4.00%. For EUR/USD, the outlook will depend on the tone of the Federal Reserve. The strong dollar is supported by high U.S. yields, with 10-year Treasury yields trading near 5.26%, while European bonds are still recovering from the recent sell-off. Dovish comments from FOMC members would give the euro an opportunity to extend its recovery, while hawkish comments would contribute to renewed weakness.

As for the intraday strategy, greater emphasis will be placed on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches around 1.1250 (the green line on the chart), with the target of rising to 1.1280. At 1.1280, the position can be closed, while the euro can also be sold in the opposite direction, targeting a move of 30–35 points from the entry level. An increase in the euro can be expected today if U.S. data are weak. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario No. 2: The euro can also be bought today if the price tests 1.1229 twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and may result in a reversal to the upside. A rise toward the opposite levels of 1.1250 and 1.1280 can be expected.

Sell Signal

Scenario No. 1: The euro can be sold after the price reaches 1.1229 (the red line on the chart). The target will be 1.1206, where the position can be closed and a long position opened immediately, targeting a 20–25-point move in the opposite direction from the level. Downward pressure on the pair may return at any time. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.

Scenario No. 2: The euro can also be sold today if the price tests 1.1250 twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and may result in a reversal to the downside. A decline toward the opposite levels of 1.1229 and 1.1206 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 at which Take Profit orders can be placed or profits can be closed manually, 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 at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should exercise extreme caution when making market-entry decisions. Before the release of important fundamental reports, it is preferable to remain 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 minimize losses. Without stop orders, you can lose the entire deposit very quickly, especially if you do not use proper 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 inherently an unsuccessful strategy for an intraday trader.