Review of Trades and Trading Tips for the Euro

The test of the 1.1650 price level occurred when the MACD indicator was just beginning to move downward from the zero line, confirming the validity of the entry point for selling the euro. As a result, the pair declined by 10 points, and that was the end of the volatility.

The single currency remained indifferent to the report, although the data strengthened the arguments of those supporting the ECB's hawkish policy. The figures showed that the broad M3 aggregate accelerated to 3.4% year-on-year, but the key factor was private-sector lending, which accelerated to 4.1%. Since lending activity reflects the economy's willingness to increase borrowing, it is reasonable to speak of rising costs and inflation risks. This picture directly confirms the emerging economic recovery indicated by the August PMI and the sharp increase in the Ifo index. Nevertheless, the euro's reaction was subdued, as EUR/USD ignored the report and remained driven by external factors.

The pair will spend the second half of the day awaiting U.S. economic data, with weekly initial jobless claims as the main release, accompanied by the goods trade balance. Jobless claims are considered an important timely indicator of the labor market because they quickly capture changes in layoffs, while the trade balance reflects the relationship between exports and imports and usually triggers only a limited reaction. For the single currency, the outlook is moderate. A decline in the number of claims will strengthen the dollar and put pressure on EUR/USD, while an increase will favor the euro. Until the data are released, the euro will remain under pressure against the dollar.

As for the intraday strategy, I will focus more on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, the euro can be bought when the price reaches around 1.1646 (the green line on the chart), with a target of rising to 1.1658. At 1.1658, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. The euro can be expected to rise today only after weak U.S. economic data. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just begun to rise from it.

Scenario #2: I also plan to buy the euro today if the price tests 1.1635 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 1.1646 and 1.1658 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after the price reaches 1.1635 (the red line on the chart). The target will be 1.1622, where I plan to exit the market and immediately buy in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Pressure on the pair will return following strong economic data. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just begun to decline from it.

Scenario #2: I also plan to sell the euro today if the price tests 1.1646 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 1.1635 and 1.1622 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price at which Take Profit can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold zones into account.

Important. Beginner Forex traders need to be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large positions.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is a losing strategy for an intraday trader from the outset.