Analysis of Trades and Trading Tips for the Euro
The price test at 1.0887 occurred when the MACD indicator had just started moving downward from the zero mark, confirming the correct entry point for selling the euro. As a result, the pair fell by only 20 pips before the selling pressure eased.
The news that the U.S. Senate, following the House of Representatives, approved an extension of government funding until the end of September this year did not trigger a surge in volatility. This indicates that market participants had already priced in this outcome. Now, the focus will shift to the Federal Reserve's future actions and signals from other central banks regarding monetary policy. Geopolitical risks and global economic growth prospects also influence investor sentiment, counteracting the short-term positive effect of the U.S. lawmakers' decision.
Today's economic calendar in the first half of the day includes only the publication of the Bundesbank's monthly report. This document often contains important details about Germany's economic climate and outlook. Analysts and investors pay close attention to the Bundesbank's comments on inflation, interest rates, consumer demand, and industrial production. Specifically, the report could provide insights into the likely future direction of the European Central Bank's monetary policy.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario #1: Today, I will consider buying the euro if the price reaches around 1.0895 (green line on the chart), aiming for growth towards 1.0937. At 1.0937, I plan to exit the market and sell the euro in the opposite direction, expecting a movement of 30-35 pips from the entry point. The euro's growth in the first half of the day is expected to continue the upward trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and has just started rising.
Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0873 price level while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth to the opposite levels of 1.0895 and 1.0937 can be expected.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.0873 level (red line on the chart), targeting a decline to 1.0833, where I intend to exit the market and immediately buy in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Selling pressure on the pair could return today if the German bank's report is weak. Important! Before selling, ensure that the MACD indicator is below the zero mark and has just started moving downward from it.
Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.0895 price level while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downward. A decline to the opposite levels of 1.0873 and 1.0833 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.
