Trade Review and Advice on Trading the Euro

During the first half of the day, a test of 1.0469 coincided with the MACD indicator just beginning to move downward from the zero mark, confirming a valid sell entry for the euro. However, due to low volatility, the expected strong decline in the pair did not materialize.

Economic indicators from Germany met expectations, limiting the downward potential for the euro. The largest economy in Europe remains stagnant due to several negative factors, including high inflation, rising credit costs, global instability, and elevated energy prices. A decline in consumer purchasing power and reduced corporate investment have also contributed to slowing economic growth.

In the second half of the day, traders will focus on the S&P/Case-Shiller Home Price Index in the 20 largest US cities and the Richmond Fed Manufacturing Index. While these reports are not primary market drivers, they could introduce short-term volatility. The S&P/Case-Shiller Index reflects housing market trends and provides insight into consumer confidence and overall economic conditions. Meanwhile, the Richmond Fed Manufacturing Index offers a snapshot of the manufacturing sector, influencing investor sentiment toward industrial stocks. Market reactions to these releases may be mixed, as they hold limited significance for currency traders.

For intraday trading, I will focus on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: A buy position on the euro is possible if the price reaches 1.0505 (green line on the chart), targeting 1.0526. At 1.0526, I plan to exit the market and sell the euro for a potential 30-35 point retracement. Today, any expected euro growth should remain within the trading range.Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Another buying opportunity arises if the price tests 1.0484 twice, while the MACD indicator is in oversold territory. This would limit the downward potential of the pair and trigger a rebound, with targets at 1.0505 and 1.0526.

Sell Signal

Scenario #1: I plan to sell the euro after reaching 1.0484 (red line on the chart). The target will be 1.0459, where I will exit the market and immediately buy in anticipation of a 20-25 point rebound. Selling pressure could return if strong US data is released.Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: I also plan to sell the euro if the price tests 1.0505 twice, while the MACD indicator is in overbought territory. This would limit the upward potential and lead to a reversal downward, with expected targets at 1.0484 and 1.0459.

Chart Explanation

• Thin green line – Entry price for buying the trading instrument.
• Thick green line – Take Profit level, where further price growth is unlikely.
• Thin red line – Entry price for selling the trading instrument.
• Thick red line – Take Profit level, where further price decline is unlikely.
• MACD Indicator – When entering the market, it is crucial to consider overbought and oversold conditions.

Important Notes for Beginner Forex Traders

Caution is key when making trading decisions. Before important economic reports are released, it is often best to stay out of the market to avoid sudden price swings. If you decide to trade during news events, always use stop-loss orders to minimize losses. Trading without stop-loss protection can quickly deplete your entire account, especially if you trade large volumes without proper risk management.

Finally, for successful trading, a clear trading plan is essential—similar to the one outlined above. Making spontaneous trading decisions based on market fluctuations is a losing strategy for intraday traders.