Analysis of Trades and Trading Tips for the Euro
The price test 1.1622 occurred when the MACD indicator had already risen significantly above the zero line, limiting the pair's upward potential. For this reason, I did not buy the euro and missed the upward movement.
Dissatisfaction with Federal Reserve Chair Jerome Powell from U.S. President Donald Trump intensified, which weakened the U.S. dollar against the euro. Renewed criticism of the Fed head sparked concerns among investors about the central bank's independence. Such verbal accusations create a precedent that undermines established principles of monetary policy and raises doubts about its long-term effectiveness. However, it's worth noting that during his first term, Trump was unhappy with Powell's performance and frequently criticized the Fed.
The U.S. real estate sector—traditionally considered a barometer of economic health—showed signs of a slowdown yesterday. Declining housing starts and home sales signal a drop in consumer activity and a deteriorating investment climate. Coupled with trade wars and geopolitical uncertainty, weak housing data intensifies recession risks, prompting analysts to revise economic growth forecasts downward.
In the first half of today, the euro may continue to rise, as the only significant event will be the publication of Germany's GfK Consumer Climate Index for June. This indicator, reflecting German consumer sentiment, could serve as an important signal regarding the state of the eurozone's largest economy. If the index value exceeds forecasts, it may reinforce confidence in the stability of the European economy and, as a result, support euro growth.
For intraday strategy, I will focus primarily on Scenarios #1 and #2.
Buy Scenario
Scenario #1: Today, buying the euro is possible upon reaching the area around 1.1690 (green line on the chart) with a target of rising to 1.1741. At 1.1741, I plan to exit the market and sell the euro in the opposite direction, aiming to move 30–35 pips from the entry point. A euro rally today is likely following strong data.
Important! Before buying, ensure the MACD indicator is above the zero line and starting to rise.
Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1665 level when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to a market reversal to the upside. A rise to the opposite levels of 1.1690 and 1.1741 can be expected.
Sell Scenario
Scenario #1: I plan to sell the euro after reaching the 1.1665 level (red line on the chart). The target will be 1.1623, where I plan to exit the market and immediately buy in the opposite direction, aiming for a 20–25 pip move in the opposite direction from that level. Selling pressure may return today if the data is weak.
Important! Before selling, make sure the MACD indicator is below the zero line and starting to decline from it.
Scenario #2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1690 level when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a market reversal to the downside. A decline to the opposite levels of 1.1665 and 1.1623 can be expected.
What's on the Chart:
- The thin green line represents the entry price where the trading instrument can be bought.
- The thick green line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price growth above this level is unlikely.
- The thin red line represents the entry price where the trading instrument can be sold.
- The thick red line indicates the expected price level where a Take Profit order can be placed, or profits can be manually secured, as further price decline below this level is unlikely.
- The MACD indicator should be used to assess overbought and oversold zones when entering the market.
Important Notes:
- Beginner Forex traders should exercise extreme caution when making market entry decisions. It is advisable to stay out of the market before the release of important fundamental reports to avoid exposure to sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop-loss orders can quickly wipe out your entire deposit, especially if you neglect money management principles and trade with high volumes.
- Remember, successful trading requires a well-defined trading plan, similar to the one outlined above. Making impulsive trading decisions based on the current market situation is a losing strategy for intraday traders.
