Trade Analysis and Advice for the Euro
The price test of 1.0975 occurred when the MACD indicator had just started moving down from the zero mark, which confirmed a valid entry point for selling the euro and resulted in a 15-point drop in the pair.
Now, as uncertainty in the global economy intensifies, investors are increasingly turning to safe-haven assets such as the U.S. dollar. The euro, on the other hand, is perceived as a riskier instrument, especially amid unclear prospects for further monetary policy decisions from the ECB. Technical analysis also confirms euro weakness. In such a situation, traders dealing with the euro should exercise particular caution. Opening long positions is justifiable only if there are clear signs of a reversal in the bearish trend — which is currently absent.
In the second half of the day, market attention will focus on U.S. consumer credit data and a speech by FOMC member Adriana D. Kugler. These events could potentially adjust market expectations, as they provide traders with fresh insights into the state of the economy and possible changes in monetary policy. Consumer credit is a significant indicator reflecting household spending activity. An increase in lending volumes may indicate consumer optimism about their financial situation. At the same time, excessively rapid growth in consumer credit could signal risks of economic overheating and excessive household debt. The dollar is largely indifferent to these factors, so I don't expect a strong reaction.
Adriana D. Kugler's speech may provide more clarity on the FOMC's current outlook regarding inflation, employment, and the overall economic forecast. Any signals suggesting potential policy adjustments could trigger fluctuations in financial markets. However, considering the Fed officials' current hawkish stance, her remarks are likely to favor the dollar.
As for the intraday strategy, I will rely primarily on the implementation of Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the euro today if the price reaches the area around 1.1011 (green line on the chart), with a target of growth to the level of 1.1117. At 1.1117, I plan to exit long positions and open shorts in the opposite direction, expecting a 30–35 point pullback. Counting on euro growth today will be difficult. Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the 1.0946 level, when the MACD indicator is in the oversold area. This would limit the downward potential and lead to a market reversal to the upside. One can expect growth to the opposite levels of 1.1011 and 1.1117.
Sell Signal
Scenario #1: I plan to sell the euro after reaching the level of 1.0946 (red line on the chart). The target will be the 1.0858 level, where I plan to exit short positions and open long ones in the opposite direction (expecting a 20–25 point move in the opposite direction). Pressure on the pair is likely to return today if strong data comes out. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to move down from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1011 level, when the MACD indicator is in the overbought area. This would limit the upward potential and lead to a market reversal downward. One can expect a decline to the opposite levels of 1.0946 and 1.0858.
Chart Explanation:
- Thin green line – entry price at which the trading instrument can be bought;
- Thick green line – expected price where Take Profit can be placed or profit manually taken, as further growth beyond this level is unlikely;
- Thin red line – entry price at which the trading instrument can be sold;
- Thick red line – expected price where Take Profit can be placed or profit manually taken, as further decline beyond this level is unlikely;
- MACD Indicator – When entering the market, it's important to follow overbought and oversold zones.
Important: Beginner Forex traders must be extremely cautious when deciding to enter the market. It's best to stay out before major fundamental reports are released to avoid being caught in sharp price swings. If you decide to trade during news events, always place stop orders to minimize losses. Without stop orders, you can very quickly lose your entire deposit, especially if you trade large volumes and don't use proper money management. And remember, successful trading requires a clear trading plan like the one I've outlined above. Making spontaneous decisions based on current market conditions is a losing strategy for intraday trading.
