Analysis of Trades and Trading Tips for the Euro
The first test of the 1.0489 price level occurred when the MACD indicator moved significantly downward from the zero mark, limiting the pair's downward potential. For this reason, I did not sell the euro. Shortly afterward, the second test of this level coincided with the MACD being in the oversold area, confirming a valid buy entry point for the euro. As a result, the pair rose by 20 pips.
Yesterday's mixed PMI data from both the eurozone and the US once again highlighted persistent issues in the manufacturing sector, which is concerning for the economies of both regions.
Today, investors will be focused on key macroeconomic data from Germany, which could significantly influence the euro's exchange rate. The IFO Business Climate Index, which reflects business confidence, is particularly important. An increase signals optimism among entrepreneurs and could support the euro. However, weaker-than-expected results may put pressure on the currency.
As for the Current Conditions Indicator, it helps evaluate the stability of the business environment. A decline may point to economic problems, potentially triggering euro sell-offs. Economic Expectations are also important: Positive results bolster market sentiment, supporting the euro.
Additionally, attention should be paid to the eurozone's trade balance. A strong surplus would strengthen the euro's position. Conversely, a deficit would act as a negative signal for the currency.
As for the intraday strategy, I will rely more on executing Scenario #1 and Scenario #2.
Buy Signal
Scenario #1: Today, I plan to buy the euro when the price reaches 1.0529 (green line on the chart), targeting growth to 1.0567. At the 1.0567 level, I plan to exit the market and sell the euro immediately in the opposite direction, aiming for a 30–35 pip movement from the entry point. Euro growth today in the first half of the day will be feasible only if the eurozone data is strong.
Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise.
Scenario #2: I will also buy the euro today if there are two consecutive tests of the 1.0498 level when the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger a reversal to the upside. Growth can be expected toward the opposite levels of 1.0529 and 1.0567.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.0498 level (red line on the chart). The target will be 1.0460, where I plan to exit the market and immediately buy in the opposite direction, aiming for a 20–25 pip movement back. Pressure on the pair may return in the case of weak IFO data.
Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline.
Scenario #2: I will also sell the euro today if there are two consecutive tests of the 1.0529 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a reversal to the downside. A decline can be expected toward the opposite levels of 1.0498 and 1.0460.
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.
