Trade Analysis and Tips for the Euro Currency

The price test at 1.1388 coincided with the moment when the MACD indicator was beginning to move downward from the zero mark, confirming an appropriate entry point to sell the euro. As a result, the pair dropped only by 10 pips.

The unexpectedly dovish outcome of the Federal Reserve meeting caused the dollar to tumble yesterday, strengthening the single currency. The central bank kept the rate unchanged, while some of the market had priced in a hike, and this gap between expectations and reality triggered the market reaction. The vote added a layer to the decision, as the pause passed by only nine votes to three, with Hammack, Kashkari, and Logan advocating for an immediate 25-basis-point increase. This divide indicated that tightening remains on the agenda, but patience has prevailed for now. The euro capitalized on the dollar's weakness. As the market adjusted to a more dovish-than-expected verdict, the EUR/USD pair moved confidently upward.

Today, the euro enters the day with an eye on a busy European agenda, which will largely determine its future trajectory. In the morning, data on Germany's GDP and consumer inflation will be released, followed by data on Eurozone GDP and the region's unemployment rate. The GDP figures will indicate how confidently the economy is growing, inflation will signal whether the European Central Bank will continue to face pressure for a tight stance, and employment data will complete the picture of the labor market's condition. For the market, the most important factor will be deviations from the forecasts. The euro can only be expected to continue rising if all key indicators show clearly positive figures. Strong economic growth and stable inflation will provide the EUR/USD pair with a basis to develop a bullish sentiment by the end of the European session. At the same time, weak data will quickly cool interest in the euro.

As for the intraday strategy, I will primarily implement scenarios #1 and #2.

Buying Scenarios

Scenario #1: I plan to buy euros today at a price around 1.1462 (green line on the chart), with a target for growth to 1.1505. At 1.1505, I plan to exit my long position and immediately sell in the opposite direction (anticipating a move of 30-35 pips in the opposite direction from the level). Growth for the euro can only be expected after strong reports. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting to rise from there.

Scenario #2: I also plan to buy euros today in the case of two consecutive tests of the price 1.1442 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. A rise to the opposite levels of 1.1462 and 1.1505 can be expected.

Selling Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1442 (the red line on the chart). The target will be 1.1417, where I intend to exit the short position and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today in the event of poor reports. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting to decline from there.

Scenario #2: I also plan to sell euros today in the case of two consecutive tests of the price 1.1462 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decline to the opposite levels of 1.1442 and 1.1417 can be expected.

What's on the Chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by the zones of overbought and oversold.

Important: New traders in the Forex market should make decisions about market entry very cautiously. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in the exchange rate. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.