Analysis of Trades and Trading Tips for the Euro
The price test at 1.1347 occurred when the MACD indicator had just started moving upward from the zero mark, confirming a proper entry point for buying the euro. However, after a 10-pip rise, pressure on the pair returned.
Statements from White House officials that trade talks with China had once again stalled pressured the dollar on Friday afternoon. Investors fear a new escalation of the trade war between the two largest economies, which traditionally leads to a flight to safe-haven assets and negatively impacts the dollar. Failures in trade negotiations increase uncertainty about the prospects for global economic growth. Many experts are already noting that a slowdown in global growth rates and further escalation of trade disputes could worsen the situation, especially for countries heavily reliant on international trade.
Today's dynamics of the European currency largely depend on the release of the Eurozone manufacturing PMI data. Without good figures, the US dollar could strengthen. Given the decline in inflation in the Eurozone, the European Central Bank is likely to continue cutting rates, and today's poor manufacturing data would support this decision, which will likely be announced this Thursday.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: Today, I plan to buy the euro upon reaching the price of around 1.1408 (green line on the chart), aiming for growth to the level of 1.1468. At 1.1468, I plan to exit the market and sell the euro in the opposite direction, targeting a move of 30–35 pips from the entry point. Rely on euro growth only after good data.
Important! Before buying, ensure the MACD indicator is above the zero mark and is just beginning to rise.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1352 price level 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 to the opposite levels of 1.1408 and 1.1468 can be expected.
Sell Scenario
Scenario #1: I plan to sell the euro after reaching the 1.1352 level (red line on the chart). The target will be the 1.1273 level, where I plan to exit the market and immediately buy in the opposite direction (targeting a move of 20–25 pips in the opposite direction from the level). Pressure on the pair could return at any moment today.
Important! Before selling, ensure the MACD indicator is below the zero mark and is just beginning its decline.
Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.1408 price level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. A decline to the opposite levels of 1.1352 and 1.1273 can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
