Analysis of Trades and Trading Tips for the European Currency
The test of the price at 1.0624 occurred when the MACD indicator had risen quite a bit from the zero level, which, in my opinion, limited the pair's upward potential. For this reason, I did not buy the euro. However, strong GDP data from France and a slowdown in inflation in the Eurozone helped euro buyers continue the uptrend, leading to a price update at 1.0665, where I recommended selling the euro on a rebound. A downward movement did occur, especially following the news of the Eurozone's economic contraction in the third quarter of this year, but a significant drop has not yet materialized. Ahead of us, there is data on the US real estate market and the consumer confidence indicator. Expectations are for fairly modest figures, indicating a decline that could trigger another wave of euro growth against the US dollar. The changes in the housing price index in the 20 largest cities in the S&P/Case-Shiller and the Chicago PMI index will have an intermediate effect and will not significantly impact the daily direction of the pair. Therefore, I will act based on the realization of scenario #1.
Buy Signal
Scenario #1: Today, you can buy the euro when the price reaches around 1.0686 (green line on the chart), with the target of reaching 1.0729. I recommend exiting the market at 1.0729 and selling the euro in the opposite direction, targeting a 30-35 point move from the entry point. Euro growth can be expected only after weak data from the United States and a sharp decline in consumer confidence. Important! Before buying, make sure that the MACD indicator is above the zero level and has just started to rise from it.
Scenario #2: You can also buy the euro today if there are two consecutive tests of the price at 1.0641 while the MACD indicator is in the oversold zone. This will limit the downward potential of the pair and lead to a market reversal upward. Expect an increase to the opposite levels of 1.0686 and 1.0729.
Sell Signal
Scenario #1: You can sell the euro after it reaches the level of 1.0641 (red line on the chart). The target will be 1.0592, where I recommend exiting the market and buying the Euro immediately in the opposite direction (aiming for a 20–25 point move in the opposite direction from the level). Pressure on the pair will increase if there is a sharp increase in consumer confidence rather than the expected decline. Important! Before selling, make sure that the MACD indicator is below the zero level and has just started to decrease from it.
Scenario #2: You can also sell the Euro today if there are two consecutive tests of the price at 1.0686 while the MACD indicator is in the overbought zone. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decrease to the opposite levels of 1.0641 and 1.0592.
On the chart:
Thin green line – entry price for buying the trading instrument.
Thick green line – the expected price where you can set Take Profit or independently fix profits, as further growth beyond this level is unlikely.
Thin red line – entry price for selling the trading instrument.
Thick red line – the expected price where you can set Take Profit or independently fix profits, as further decline below this level is unlikely.
MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important. For novice traders in the forex market, it is essential to be very cautious when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price swings. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you are not using proper risk management and are trading with large volumes.
And remember that for successful trading, you need to have a clear trading plan, similar to the one presented above. Making spontaneous trading decisions based on the current market situation is initially a losing strategy for intraday traders.