Analysis of Trades and Trading Recommendations for the Euro

The test of the 1.0547 price level coincided with the MACD indicator significantly dropping below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the euro. Shortly after, a second test occurred when the MACD indicator was in oversold territory, allowing Scenario #2 (buying) to play out. As a result, the pair rose by more than 30 pips.

With disappointing business activity data, traders are showing increased caution, and today will likely be no exception. Manufacturing activity indicators from Germany, the engine of the Eurozone, may signal an economic slowdown. This, in turn, could pose challenges for the euro, which is expected to remain under pressure due to uncertainty in economic policy.

Given the current situation, Christine Lagarde will likely need to acknowledge the necessity of continuing a dovish monetary policy stance during today's speech. At the same time, rising inflation remains a pressing issue, keeping the central bank in a difficult position. Consumption and investment need support, but rising prices create additional headaches for economists.

Any poor data from the Eurozone could quickly bring renewed pressure on the euro, which benefited from the absence of significant U.S. data at the end of last week and saw active growth. As for the intraday strategy, I will continue to rely on executing Scenarios #1 and #2.

Buy Scenarios

Scenario #1:

Today, buying the euro is possible when the price reaches around 1.0548 (green line on the chart), targeting a rise to 1.0609. At 1.0609, I plan to exit the market and sell the euro in the opposite direction, aiming for a movement of 30–35 pips from the entry point. A rise in the euro today during the first half of the day can only be expected after positive data. Important! Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.

Scenario #2:

I also plan to buy the euro today in the event of two consecutive tests of the 1.0514 price level when the MACD indicator is in oversold territory. This will limit the pair's downward potential and lead to an upward reversal. A rise can be expected to the opposing levels of 1.0548 and 1.0609.

Sell Scenarios

Scenario #1:

I plan to sell the euro after it reaches the level of 1.0514 (red line on the chart). The target will be the level of 1.0466, where I intend to exit the market and immediately buy in the opposite direction, aiming for a 20–25 pips movement in the opposite direction from the level. Pressure on the pair could return at any moment, but selling at the highest possible levels is better. Important! Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.

Scenario #2:

I also plan to sell the euro today in the event of two consecutive tests of the 1.0548 price level when the MACD indicator is in overbought territory. This will limit the pair's upward potential and lead to a downward reversal. A decline can be expected to the opposing levels of 1.0514 and 1.0466.

What's on the Chart:

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Notes for Beginner Forex Traders:

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.