Analysis of Trades and Trading Tips for the Euro
The test of the 1.0847 level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upside potential. For this reason, I did not buy the euro.
Concerns about a deepening slowdown in Europe's economic recovery continue to pressure the euro. Investors will increasingly concentrate on macroeconomic data to anticipate the European Central Bank's future monetary policy direction. Recently, the ECB has clarified that further rate cuts in the eurozone remain uncertain. On the other hand, Friday's comments from Federal Reserve officials reinforced expectations of a potentially persistent hawkish stance from the Fed, which generally supports the dollar.
Today, business activity indices in key sectors of the eurozone economy will be published. Special attention will be given to the manufacturing PMI, a crucial indicator of industrial output. An increase in this figure may signal production growth and economic strengthening, while a decline could indicate slowing growth or recession — putting additional pressure on the euro. The services PMI is equally important, reflecting the condition of the services sector, which includes trade, finance, transport, and other industries. Combining manufacturing and services data, the composite PMI provides the most comprehensive snapshot of the eurozone's economic health. It serves as a barometer for future economic growth or contraction and will be closely monitored by traders today as they assess whether to continue buying the euro within the broader uptrend.
For intraday strategy, I will focus primarily on implementing Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro upon reaching the 1.0842 level (green line on the chart), with a target of 1.0894. At 1.0894, I intend to exit the market and open a sell position in the opposite direction, aiming for a 30–35 pip move from the entry point. A bullish outlook for the euro in the first half of the day will only be relevant if the economic data is strong. Important! Before buying, ensure the MACD indicator is above the zero line and beginning to rise.
Scenario #2: I also plan to buy the euro if there are two consecutive tests of the 1.0815 level while the MACD indicator is in the oversold zone. This would limit the pair's downside potential and trigger a reversal to the upside. A rally toward the opposite levels of 1.0842 and 1.0894 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.0815 level (red line on the chart). The target will be 1.0766, where I plan to exit the market and immediately open a buy position in the opposite direction (expecting a 20–25 pip move in the opposite direction). If the data is weak, downward pressure on the pair is likely to return. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to move down from it.
Scenario #2: I also plan to sell the euro if there are two consecutive tests of the 1.0842 level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and trigger a downward reversal. A decline toward the opposite levels of 1.0815 and 1.0766 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.
