Trade Analysis and Tips for Trading the European Currency

There was no testing of the levels I indicated on Friday.

The weak retail report weighed on the dollar, as U.S. sales fell 0.6% in July, marking the worst dynamics in over a year. Given that retail sales are considered an important barometer of consumer demand, and its cooling enhances expectations for a more dovish Federal Reserve policy, this pressured the American currency.

Today, the euro enters the first half of the day with a sparse agenda, where the only item is a speech by European Central Bank representative Philip Lane. Speeches by members of the central bank traditionally attract attention, as any hint about the future trajectory of rates can move the currency. However, in this case, Lane's comments are unlikely to change the power dynamics. The market does not expect new signals from him; therefore, no significant response in the euro is anticipated. With such a weak agenda, the initiative on the euro will remain with the buyers.

As for the intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: Today, I can buy euros when the price reaches around 1.1601 (green line on the chart), with a target for growth to 1.1626. At 1.1626, I plan to exit the market and sell the euro in the opposite direction, expecting a move of 30-35 pips from the entry point. The growth of the euro can be expected to continue in line with the trend. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting its rise from it.

Scenario No. 2: I also plan to buy euros today in the event of two consecutive tests of the price at 1.1583, when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 1.1601 and 1.1626.

Sell Scenarios

Scenario No. 1: I plan to sell euros once the price reaches 1.1583 (the red line on the chart). The target will be 1.1564, where I intend to exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today with a dovish tone from ECB representatives. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.

Scenario No. 2: I also plan to sell euros today in the event of two consecutive tests of the price at 1.1601, when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline towards the opposite levels of 1.1583 and 1.1564 can be expected.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.