Analysis of Trades and Trading Tips for the Euro
The test of the 1.1612 level occurred when the MACD indicator had already remained in the overbought zone for quite some time. This allowed Scenario #2 for selling the euro to play out, resulting in a more than 30 pips decline.
The unexpected Israeli strike on Iran's nuclear facilities today triggered a flight from risk assets, strengthening the U.S. dollar's position as a safe haven. Gripped by sudden geopolitical instability, market participants rushed to offload risk assets, reallocating capital to more conservative instruments traditionally considered safe havens during turmoil.
This morning, the market will focus on data releases, including Germany's Consumer Price Index (CPI), eurozone industrial production trends, and the eurozone trade balance. Market participants and analysts will carefully analyze these economic indicators, acting as a litmus test of the region's economic health. Germany's CPI will serve as an important measure of inflation. If the actual figures exceed forecasts, this may prompt the European Central Bank to adopt a more cautious monetary policy stance, likely supporting the euro. Conversely, lower inflation readings could result in a bearish reaction.
Eurozone industrial production dynamics will offer insights into the state of the manufacturing sector, a key driver of economic growth. Rising production levels suggest economic strength, while declines may point to potential challenges.
The eurozone trade balance reflects the difference between exports and imports. A trade surplus indicates regional competitiveness on the global stage and can strengthen the euro. A deficit, on the other hand, may exert downward pressure on the currency.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: I plan to buy the euro today upon reaching the price area of around 1.1560 (green line on the chart), with the goal of rising toward 1.1621. At 1.1621, I plan to exit the market and sell the euro in the opposite direction, targeting a 30–35 pip retracement from the entry point. Expecting a euro rally today may be difficult.
Important: Before buying, ensure the MACD indicator is above the zero mark and starting to rise from it.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the 1.1511 level while the MACD indicator is in the oversold zone. This would limit the pair's downside potential and trigger an upward reversal. A rise toward the opposite levels of 1.1560 and 1.1621 can be expected.
Sell Scenario
Scenario #1: I plan to sell the euro after it reaches the 1.1511 level (red line on the chart). The target will be 1.1445, where I intend to exit the market and immediately buy in the opposite direction (aiming for a 20–25 pip bounce from the level). Selling pressure on the pair may return at any moment today.
Important: Before selling, ensure the MACD indicator is below the zero mark and beginning to decline.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the 1.1560 level while the MACD indicator is in the overbought zone. This would limit the pair's upside potential and trigger a downward reversal. A decline toward the opposite levels of 1.1511 and 1.1445 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.
