Analysis of Trades and Trading Tips for the Euro
The test of the 1.0488 level coincided with the moment when the MACD indicator was beginning to move downward from the zero mark. This confirmed the validity of the entry point for selling the euro, resulting in a 15-pip drop.
Next year, the potential for a spike in inflation adds additional pressure on the Federal Reserve. Despite cutting interest rates yesterday, officials also revised their forecasts, carefully analyzing the current economic situation. In the face of uncertainty arising from political changes, Fed officials sought to prevent a possible inflationary shock that could result from the actions of the new U.S. president. A critical factor is the possibility that the policies implemented by the new administration could significantly alter the financial landscape. Yesterday's measures to stimulate the economy may lead to increased consumer demand and, consequently, higher inflation. Furthermore, Trump's protectionist policies are likely to exacerbate the problem.
Today's figures on the current account balance from the European Central Bank and Germany's GfK Consumer Climate Index are unlikely to impact the foreign exchange market significantly. Investors have long factored into their forecasts the instability in the eurozone economy and the likelihood of further ECB rate cuts, which continue to exert pressure on the euro. The influence of this data is expected to be insufficient to reverse the trend. The best approach remains to look for selling opportunities during corrections, which aligns with continuing the new downward trend.
I will primarily rely on implementing Scenarios #1 and #2 for intraday trading.
Buy Signal
Scenario #1: Today, I plan to buy the euro upon reaching the 1.0400 level (green line on the chart) with a target of rising to the 1.0425 level. At 1.0425, I plan to exit the market and simultaneously open a short position, aiming for a 30-35 pip movement in the opposite direction from the entry point. Anticipating euro growth during the first half of the day is only possible if strong data from the eurozone is released.
Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to move upward.
Scenario #2: I also plan to buy the euro today in case of two consecutive tests of the 1.0375 level, while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. The expected targets for growth are 1.0400 and 1.0425.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches the 1.0375 level (red line on the chart). The target will be the 1.0333 level, where I plan to exit the market and simultaneously open a long position, aiming for a 20-25 pip movement in the opposite direction from this level. Pressure on the pair can return at any moment.
Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to move downward.
Scenario #2: I also plan to sell the euro today in case of two consecutive tests of the 1.0400 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal downward. The expected targets for the decline are 1.0375 and 1.0333.
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.
