Trade Review and Tips for Trading the Euro

The test of the 1.1385 level occurred when the MACD indicator had already moved significantly above the zero mark, which limited the pair's upward potential. For this reason, I did not buy the euro.

Aside from the European Central Bank's decision, attention in the second half of the day should be focused on the release of U.S. data, including initial jobless claims and building permits. FOMC member Michael S. Barr is also scheduled to speak, although it's unlikely he will say anything substantially new compared to Powell's comments yesterday. A slight increase in jobless claims from the previous week is expected. However, more interest is likely to be placed on the building permits data, as it provides insight into the outlook for the housing sector. An increase in permits would suggest a recovery in construction, which is a positive signal for the economy overall. Barr is expected to reaffirm Powell's message on the need for cautious monetary policy to continue combating inflation.

Overall, today is rich in events that could influence market dynamics — with heightened volatility expected especially during ECB President Christine Lagarde's speech.

For intraday strategy, I'll primarily rely on the execution of scenarios #1 and #2.

Buy Signal

Scenario #1: Today, I plan to buy the euro when the price reaches the area around 1.1385 (green line on the chart), targeting growth toward 1.1455 (thicker green line). I plan to exit long positions at 1.1455 and open short positions in the opposite direction, anticipating a 30–35 point move down from that level. Buying the euro today would align with the ongoing bullish trend.Important: Before buying, make sure the MACD indicator is above the zero line and just beginning to rise from it.

Scenario #2: I also plan to buy the euro if we see two consecutive tests of the 1.1357 level, with MACD in oversold territory. This will limit the pair's downward potential and lead to a reversal upward. The expected targets are 1.1385 and 1.1455.

Sell Signal

Scenario #1: I plan to sell the euro after a drop to 1.1357 (red line on the chart), with the target set at 1.1294. At that point, I'll exit shorts and consider buying in the opposite direction for a 20–25 point rebound. Downward pressure on the pair will likely return if the U.S. data surprises to the upside.Important: Before selling, make sure the MACD indicator is below the zero line and just starting to fall from it.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of the 1.1385 level, while MACD is in the overbought zone. This will cap the pair's upside and lead to a reversal downward. The targets will be 1.1357 and 1.1294.

Chart Legend:

• Thin green line – Entry point for buying the instrument
• Thick green line – Suggested take-profit level, or a price point above which further growth is unlikely
• Thin red line – Entry point for selling the instrument
• Thick red line – Suggested take-profit level, or a price point below which further decline is unlikely
• MACD indicator – When entering the market, it's crucial to assess overbought/oversold conditions based on MACD zones

Important Note for Beginner Traders:

If you're new to Forex trading, it's crucial to approach entry decisions with caution. During the release of important economic data, it's best to stay out of the market to avoid sudden price spikes. If you do choose to trade during news releases, always use stop-loss orders to limit your risk. Without them, especially if trading large positions without proper money management, your entire deposit could be wiped out quickly.

Remember: successful trading requires a clear, structured trading plan — just like the one outlined above. Making impulsive decisions based on the current market situation is an inherently losing strategy for intraday traders.