Trade Analysis and Advice for Trading the Euro

The price test at 1.1715 occurred at a moment when the MACD indicator had moved far below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

The euro weakened in the first half of the day mainly due to disappointing IFO data from Germany and slowing inflation in the eurozone. The IFO index, an important barometer of the German economy, again failed to meet expectations, signaling a continued downturn in industry and restrained future expectations. Additional pressure came from eurozone inflation data, which showed a greater-than-expected slowdown in consumer price growth. Together, these factors heightened investor concerns about the state of Germany's economy—the largest in Europe—and the possibility of further monetary easing by the European Central Bank.

During today's U.S. trading session, special attention will be paid to speeches by John Williams and Raphael Bostic, members of the Federal Open Market Committee (FOMC). Market participants will focus on looking for signs of a likely adjustment by the Fed regarding further interest rate cuts. Traders will try to determine whether the latest labor market data will prompt a more cautious approach to monetary easing. If so, the dollar could strengthen even further.

For intraday strategy, I will mainly rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: Buy euros today around 1.1730 (green line on the chart) with a target of 1.1762. At 1.1762, I plan to exit the market, also selling euros in the opposite direction for a 30–35 point move from the entry point. Significant euro growth can be expected only after a dovish stance from the Fed. Important: Before buying, ensure that the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy euros if the price tests 1.1711 twice consecutively while the MACD indicator is in the oversold area. This limits the pair's downward potential and should trigger a market reversal upward. Expected targets are 1.1730 and 1.1762.

Sell Signal

Scenario #1: Sell euros after reaching 1.1711 (red line on the chart). The target is 1.1681, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 point move back from this level). Selling pressure will return only if the Fed takes a hawkish stance. Important: Before selling, ensure that the MACD indicator is below the zero line and just beginning to decline from it.

Scenario #2: I also plan to sell euros if the price tests 1.1730 twice consecutively while the MACD indicator is in the overbought area. This limits the pair's upward potential and should trigger a market reversal downward. Expected targets are 1.1711 and 1.1681.

What the Chart Shows

• Thin green line: Entry price for buying the instrument.
• Thick green line: Suggested Take Profit or level to secure profits, as further growth beyond this point is unlikely.
• Thin red line: Entry price for selling the instrument.
• Thick red line: Suggested Take Profit or level to secure profits, as further decline below this point is unlikely.
• MACD indicator: Use overbought and oversold zones when entering trades.

Important. Beginning traders in the Forex market must be very cautious when making decisions about entering the market. It's best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management strategies and are trading large volumes.

And remember that for successful trading, it is essential to have a clear trading plan, similar to the one I presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for day traders.