Trade analysis and tips for trading the European currency
The test of the price at 1.0738 in the first half of the day occurred at a moment when the MACD indicator was starting to move down from the zero mark, which seemed like a proper confirmation of the signal to sell the euro. However, the pair didn't decline, leading to a loss realization. The released statistics from Germany didn't greatly please traders but also predictably didn't harm the market. Now, in the second half of the day, attention should be paid to the figures on changes in wholesale inventories in the US, although they are also unlikely to lead to a spike in volatility. For this reason, it's best to act within the channel in which the pair has been trading since the beginning of the week. As for the intraday strategy, I plan to act based on the implementation of Scenario #2, as I don't expect strong movements.
Buy signal
Scenario #1: Today, I plan to buy the euro when the price reaches around 1.0755 (green line on the chart), with the goal of rising to the level of 1.0788. At the point of 1.0788, I will exit the market and also sell the euro in the opposite direction, targeting a movement of 30-35 points from the entry point. Today, the rise of the euro can be expected only after weak US statistics and a breakthrough of the daily maximum. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the price at 1.0735 when the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to a reversal of the market upward. One can expect a rise to the opposite levels of 1.0755 and 1.0788.
Sell signal
Scenario #1: I will sell the euro after reaching the level of 1.0735 (red line on the chart). The target will be the level of 1.0708, where I plan to exit the market and buy the euro immediately in the opposite direction (targeting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return in the event of a lack of buyer activity around the daily maximum and strong US data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decrease from it.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the price at 1.0755 when the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a reversal of the market downward. One can expect a decline to the opposite levels of 1.0735 and 1.0708.
On the chart:
Thin green line - entry price, at which the trading instrument can be bought.
Thick green line - the expected price where Take profit can be placed, or profits can be fixed independently, as further growth above this level is unlikely.
Thin red line - entry price at which the trading instrument can be sold.
Thick red line - the expected price where Take profit can be placed or profits can be fixed independently, as further decline below this level is unlikely.
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Beginner traders in the forex market should be very cautious when making entry decisions. It's best to stay out of the market before important fundamental reports are released to avoid being caught in sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. You need to place stop orders to avoid losing your entire deposit, especially if you don't use money management and trade with large volumes.
Remember, for successful trading, you need to have a clear trading plan similar to the one presented above. Spontaneous trading decisions based on the current market situation are initially a losing strategy for an intraday trader.