Analysis of Trades and Trading Tips for the Euro
The 1.0415 price test occurred when the MACD indicator began moving upward from the zero mark, confirming a correct entry point for buying the euro. As a result, the pair rose to the target level of 1.0451. Selling from 1.0451 on a rebound, as mentioned in my forecast for the second half of the day, allowed for a profit of approximately 30 pips.
Weak U.S. GDP growth data indeed pressured the U.S. dollar, temporarily strengthening the euro. Traders began buying the euro, betting on the recovery of the Eurozone economy, especially after the European Central Bank meeting. However, the situation soon changed, as new threats from Donald Trump regarding trade tariffs increased pressure on risk assets, restoring demand for the dollar.
These threats, as always, created market nervousness, convincing investors to seek safe-haven assets again. Given the dollar's reserve currency status, it again came into focus, maintaining its position against the euro. Market participants are awaiting new signals that could shift the current balance. Future economic reports and political statements may be key in determining the EUR/USD trend. Whether this marks a final reversal or a continuation of the sideways movement—time will tell.
Considering the current economic situation in Europe, especially in Germany, today's unemployment rate and consumer price index data may be key indicators for investors. A decline in unemployment combined with lower inflation could signal an improvement in economic conditions, but it may also weaken the euro. On the other hand, high inflation and persistent unemployment could put even greater pressure on the euro, intensifying negative sentiment in the currency market. In this case, the euro could lose ground against the U.S. dollar.
I will rely primarily on the implementation of scenarios No.1 and No.2.
Buy Signal
Scenario No.1: Today, I will buy the euro upon reaching 1.0399 (green line on the chart) with a target of 1.0430. At 1.0430, I plan to exit the market and sell the euro on a rebound, aiming for a 30-35 pip movement from the entry point. Expecting euro growth in the first half of the day will be quite difficult. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.
Scenario No.2: I also plan to buy the euro if there are two consecutive tests of the 1.0381 price level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to an upward reversal. Growth toward the opposite levels of 1.0399 and 1.0430 can be expected.
Sell Signal
Scenario No.1: I plan to sell the euro after reaching the 1.0381 level (red line on the chart). The target will be 1.0353, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20-25 pip movement in the opposite direction from this level). Downward pressure on the pair may return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.
Scenario No.2: I also plan to sell the euro today if there are two consecutive tests of the 1.0399 price level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a reversal downward. A decline toward the opposite levels of 1.0381 and 1.0353 can be expected.
Chart Notes
- Thin green line: Entry price for buying the trading instrument.
- Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
- Thin red line: Entry price for selling the trading instrument.
- Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
- MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.
Important Note for Beginner Traders
- Always approach market entry decisions cautiously.
- Avoid trading during major news releases to sidestep volatile price swings.
- If trading during news releases, always set stop-loss orders to minimize losses.
- Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
- A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.
