Trade Breakdown and Tips for Trading the Euro

The first test of the 1.1730 level occurred when the MACD indicator had already dropped significantly below the zero mark, which limited the pair's downward potential. For this reason, I did not sell the euro and missed the entire downward movement.

Judging by the euro's sell-off, it seems that market participants who previously bought the currency now believe that the U.S.-EU trade agreement will benefit the U.S. economy more than the eurozone. This, in turn, had a negative impact on the value of the euro. In addition to trade agreements, demand for the dollar is also being supported by the Federal Reserve's more restrictive monetary policy compared to that of the European Central Bank. The interest rate differential between the U.S. and the eurozone will continue to exert downward pressure on the euro, making the dollar more attractive for yield-seeking investors.

Due to the absence of major U.S. economic data in the second half of the day, there are no obstacles to further weakening of the euro against the dollar. However, this situation should not be interpreted as a purely one-way trend. It's important to remember that currency markets are sensitive to multiple factors, and short-term fluctuations can be misleading. Moreover, market participants are closely monitoring any comments from European Central Bank officials.

As for the intraday strategy, I will primarily rely on scenarios #1 and #2.

Buy Signal

Scenario #1: Today, buying the euro is possible upon reaching the 1.1687 level (green line on the chart), with a target of 1.1743. At 1.1743, I plan to exit the market and also sell the euro in the opposite direction, expecting a 30–35 point movement from the entry point. A strong rally in the euro today is unlikely. Important! Before buying, make sure the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1649 level, at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a market reversal upward. A rise to the opposite levels of 1.1687 and 1.1743 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after reaching the 1.1649 level (red line on the chart). The target is 1.1595, where I intend to exit the market and immediately buy in the opposite direction (expecting a 20–25 point move back from the level). Downward pressure on the pair is expected to remain. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1687 level, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward reversal. A decline toward the opposite levels of 1.1649 and 1.1595 can be expected.

Chart Legend:

• Thin green line – entry price for buying the trading instrument
• Thick green line – projected level to set Take Profit or manually fix profits, as further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – projected level to set Take Profit or manually fix profits, as further decline below this level is unlikely
• MACD indicator – When entering the market, it is important to rely on overbought and oversold zones

Important: Beginner Forex traders must be extremely cautious when deciding to enter the market. It is best to stay out of the market ahead of important fundamental reports to avoid sharp price swings. If you do choose to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-losses, you can quickly lose your entire deposit, especially if you ignore money management and trade large volumes.

And remember: successful trading requires a clear trading plan, such as the one I presented above. Making spontaneous trading decisions based on current market conditions is an inherently losing strategy for an intraday trader.