Trade Review and Tips for Trading the Euro

The price test at 1.0234 occurred when the MACD indicator just began moving downward from the zero line, confirming a valid entry point for selling the euro in line with the downtrend. However, after a 20-point drop, the pressure on the pair eased.

Positive revisions to the final PMI index for the manufacturing sector in Germany and the Eurozone helped stabilize the euro and prevent further declines. In the second half of the day, a similar report will be released for the U.S. If the ISM index exceeds 50 points, it will signal growth in U.S. manufacturing activity, which could boost investor optimism about the U.S. economy. In that case, the dollar is likely to strengthen, and given the ongoing pressure on the euro, the pair could drop significantly.

The speech by Raphael Bostic, a member of the FOMC, could also be a crucial factor. His comments on the state of the economy and monetary policy outlook may provide further clues about the Federal Reserve's intentions. Any hints at maintaining a restrictive rate policy could serve as a catalyst for dollar strength. Considering that Trump recently stated the Fed made the right decision by pausing rate cuts last week, the regulator has even fewer reasons to ease policy in the near term.

For intraday strategy, I will primarily rely on Scenarios #1 and #2.

Buy Signal

Scenario #1: Buy the euro today upon reaching 1.0267 (green line on the chart) with a target of 1.0317. At 1.0317, I plan to exit the market and sell the euro in the opposite direction, aiming for a 30-35 point retracement from the entry point. Expect a rise in the euro only after weak U.S. data.Important! Before buying, ensure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the euro today if the 1.0235 level is tested twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Expect growth towards 1.0267 and 1.0317.

Sell Signal

Scenario #1: I plan to sell the euro after it reaches 1.0235 (red line on the chart), targeting 1.0194, where I will exit the market and buy back in the opposite direction (20-25 points rebound expected). Pressure on the pair could return at any moment, especially after strong U.S. data.Important! Before selling, ensure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the euro today if the 1.0267 level is tested twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. Expect a decline toward 1.0235 and 1.0194.

Chart Indicators Explanation:

• Thin green line – Entry price for buying the trading instrument.
• Thick green line – Take Profit level or a suggested price for locking in profits, as further growth above this level is unlikely.
• Thin red line – Entry price for selling the trading instrument.
• Thick red line – Take Profit level or a suggested price for locking in profits, as further declines below this level are unlikely.
• MACD Indicator – It's important to follow overbought and oversold zones when entering trades.

Important Notes for Beginner Forex Traders:

• Be cautious when making market entry decisions. It's best to stay out of the market before the release of important fundamental reports to avoid sharp price swings.
• If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you could quickly lose your entire deposit, especially if you're not practicing proper money management and trading with large volumes.
• Remember: For successful trading, you need a clear trading plan, similar to the one outlined above. Spontaneous trading decisions based on current market conditions are an inherently losing strategy for intraday traders.