Trade Analysis and Recommendations for the Euro

The 1.0887 price test coincided with a moment when the MACD indicator had already moved significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the euro.

Discussions about a potential continuation of the Federal Reserve's rate cuts have taken a back seat, while market focus has shifted toward the European Central Bank (ECB) and its inclination toward easing monetary policy further. Given the favorable inflation data in the eurozone, the likelihood of a rate cut at the next ECB meeting is quite high. This shift in investor sentiment has strengthened the U.S. dollar, as expectations of a more dovish ECB stance could undermine the euro's recent bullish trend.

This afternoon, attention will be on a series of U.S. economic indicators, including initial jobless claims, the Philadelphia Fed Manufacturing Index, and the current account balance. Positive U.S. data could further strengthen the dollar against the euro. A decline in jobless claims would indicate labor market stability, while an increase in the Philadelphia Fed Index would suggest growth in the region's manufacturing sector. These factors combined could have a significant impact on the dollar's movement. If the data meets or exceeds expectations, the dollar will gain support and strengthen against other currencies, particularly the euro. Otherwise, the dollar may weaken.

Regarding intraday strategy, I will primarily rely on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buying the euro today is possible when the price reaches 1.0861 (green line on the chart), targeting a rise to 1.0916. At 1.0916, I plan to exit the market and sell the euro in the opposite direction, expecting a 30-35 point movement from the entry point. A euro rally today is only likely if U.S. data comes in weak. Important! Before buying, make sure the MACD indicator is above zero and just starting to rise.

Scenario #2: I also plan to buy the euro if there are two consecutive tests of the 1.0826 level, while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger a bullish reversal. A rise toward the 1.0861 and 1.0916 resistance levels can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after reaching the 1.0826 level (red line on the chart), targeting 1.0775, where I will exit the market and immediately buy in the opposite direction (expecting a 20-25 point retracement from the level). Selling pressure on the pair may return if U.S. data is strong. Important! Before selling, make sure the MACD indicator is below zero and just starting to decline.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of the 1.0861 level, while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a bearish reversal, with expected declines toward 1.0826 and 1.0775.

Chart Explanation:

• Thin green line – entry price for buy trades.
• Thick green line – estimated price where Take Profit can be placed, as further growth above this level is unlikely.
• Thin red line – entry price for sell trades.
• Thick red line – estimated price where Take Profit can be placed, as further decline below this level is unlikely.
• MACD indicator – traders should consider overbought and oversold zones when entering the market.

Important Note for Beginner Traders:

New traders in the Forex market should exercise caution when making entry decisions. It is best to stay out of the market before major fundamental reports to avoid sudden price swings. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop orders, you risk losing your entire deposit very quickly, especially if you trade large volumes without proper money management.

Remember, successful trading requires a clear trading plan, like the one provided above. Spontaneous decisions based on current market movements often lead to losses for intraday traders.