Trade Analysis and Recommendations for the European Currency

A price test at 1.1514 occurred when the MACD indicator had just begun to move upward from the zero mark, confirming a proper entry point for buying the euro. As a result, the pair rose only 10 points, after which the bullish momentum subsided.

Retail sales in the eurozone came in worse than economists expected, declining by 0.1%. However, this had no noticeable impact on traders, leaving market balance intact.

Several public statements from members of the Federal Open Market Committee (FOMC) are scheduled soon, including Michael S. Barr, John Williams, and Christopher Waller. Experts generally believe that rushing to cut the key interest rate further would be premature. This cautious tone, evident across financial markets, reflects growing consensus within the Federal Reserve about the need for a more measured approach.

Despite signs of slowing economic activity, current data do not indicate an urgent need for monetary easing. Inflation could still resume its rise, and the labor market showed unexpected stability yesterday. Market participants are watching FOMC comments closely to assess the future trajectory of interest rates. Signals suggesting a tighter policy could trigger asset sell-offs and strengthen the U.S. dollar, while dovish rhetoric could encourage demand for risk assets.

As for the intraday strategy, I'll be relying mainly on Scenarios #1 and #2 below.

Buy Signal

Scenario #1: Buy the euro today when the price reaches around 1.1525 (green line on the chart) with a target of 1.1566. At 1.1566, I plan to exit the market and open a short (sell) position in the opposite direction, aiming for a 30–35-point move from the entry point. A euro rise today will only be likely if the Fed officials adopt a dovish tone.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario #2: I also plan to buy the euro if there are two consecutive tests of the 1.1508 level while the MACD is in the oversold area. This should limit the pair's downward potential and trigger a reversal upward. A rise toward the 1.1525 and 1.1566 levels can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after it reaches 1.1508 (red line on the chart). The target will be 1.1477, where I plan to exit and open a buy position in the opposite direction (expecting a 20–25-point reversal from that level). Selling pressure on the pair could return at any moment.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of the 1.1525 level while the MACD is in the overbought area. This will limit the pair's upward potential and trigger a downward reversal. A drop toward the 1.1508 and 1.1477 levels can then be expected.

Chart Explanation

• Thin green line – entry price at which a buying position can be opened;
• Thick green line – expected level for placing Take Profit orders or manually securing profit (further growth beyond this level is unlikely);
• Thin red line – entry price at which a selling position can be opened;
• Thick red line – expected level for placing Take Profit orders or manually securing profit (further decline below this level is unlikely);
• MACD indicator – when entering the market, focus on overbought and oversold zones.

Important Notes for Beginner Forex Traders

Be extremely cautious when deciding to enter the market. Before the release of major fundamental reports, it's best to stay out of the market to avoid sharp price swings. If you choose to trade during news events, always set stop-loss orders to minimize potential losses. Trading without stop-losses can lead to a rapid loss of your entire deposit, especially if you ignore money management principles and trade large volumes.

And remember: To trade successfully, you must have a clear trading plan, such as the one presented above. Spontaneous trading decisions based on current market movement are, from the start, a losing strategy for any intraday trader.