Analysis of Trades and Trading Tips for the Euro
The test of the 1.0918 price level occurred when the MACD indicator had already moved significantly above the zero mark, which, in my opinion, limited the pair's upward potential. For this reason, I did not buy the euro. Shortly after, there was another test of 1.0918 while the MACD was in the overbought zone, which allowed for Scenario #2 to sell to materialize. However, after a 20-pip correction, demand for the euro returned.
Reports regarding U.S.-Ukraine negotiations and the possibility of a temporary ceasefire have supported interest in riskier assets. Market participants reacted positively to the prospect of easing tensions, leading to a rise in prices and a weakening of the U.S. dollar. However, this optimism may be short-lived. Key factors will include the outcomes of further discussions and Russia's concrete actions toward resolving the conflict. If negotiations fail, risk-related assets could face a wave of sell-offs.
Today, apart from European Central Bank President Christine Lagarde's speech, there are no significant economic releases. Given Lagarde's substantial influence on the market, her statements could be crucial in determining the direction. Considering the current economic situation in the Eurozone, any mention of maintaining a tight monetary policy could serve as a catalyst for strengthening the euro.
For intraday strategy, I will primarily rely on Scenarios #1 and #2.
Buy Signal
Scenario #1: I plan to buy the euro today if the price reaches 1.0908 (green line on the chart), targeting a rise to 1.0945. At 1.0945, I intend to exit the market and sell the euro in the opposite direction, aiming for a 30-35 pip movement from the entry point. The euro is expected to continue its upward trend in the first half of the day. Important: Before buying, ensure that the MACD indicator is above the zero mark and starting to rise.
Scenario #2: I will also consider buying the euro today if there are two consecutive tests of the 1.0890 price level while the MACD indicator is in the oversold zone. This will limit the pair's downside potential and lead to a market reversal to the upside, with expected growth toward the opposite levels of 1.0908 and 1.0945.
Sell Signal
Scenario #1: I plan to sell the euro after it reaches 1.0890 (red line on the chart), targeting 1.0860, where I intend to exit the market and immediately buy in the opposite direction, aiming for a 20-25 pip movement in the reverse direction. Selling pressure on the pair could return today if Lagarde adopts a dovish tone. Important: Before selling, ensure that the MACD indicator is below the zero mark and starting to decline.
Scenario #2: I will also consider selling the euro today if there are two consecutive tests of the 1.0908 price level while the MACD indicator is in the overbought zone. This will limit the pair's upside potential and lead to a downward market reversal, with an expected decline toward the opposite levels of 1.0890 and 1.0860.
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.
