Trade Analysis and Tips for Trading the Euro

The test of the 1.1731 price level occurred when the MACD indicator was just beginning to move downward from the zero mark, confirming a valid entry point for selling the euro. As a result, the pair declined toward the target level of 1.1704.

The euro continued to lose ground against the dollar after Eurozone GDP data for the first quarter of this year failed to impress, showing growth of only 0.1%. Industrial production even declined by 2.1% year-over-year. These macroeconomic indicators point to dangerous stagnation trends in the EU economy, which could lead to fairly serious economic consequences. The fact that the European Central Bank can no longer resort to additional economic stimulus measures also creates further challenges for ECB leadership.

U.S. inflation data will be released shortly. Information on the U.S. Producer Price Index (PPI) for April, as well as the core version of the indicator, will be published. A decline in the indicator could signal a slowdown in inflationary processes, though this outcome is unlikely. Particular attention will be paid to the core PPI, as it better reflects persistent inflationary trends by excluding volatile food and energy prices.

At the same time, speeches by FOMC members Susan M. Collins and Neel Kashkari are expected. Their statements may provide insight into the Fed's current assessment of future interest rates — especially given the rise in consumer inflation in the country.

As for the intraday strategy, I will rely more heavily on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible when the price reaches the level of 1.1716 (the green line on the chart), with a target of growth toward the 1.1747 level. At 1.1747, I plan to exit the market and also sell the euro in the opposite direction, aiming for a movement of 30–35 points from the entry level. Euro growth today can only be expected after weak U.S. data.Important! Before buying, make sure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1695 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. Growth toward the opposite levels of 1.1716 and 1.1747 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1695 level (the red line on the chart). The target will be the 1.1649 level, where I plan to exit the market and immediately buy in the opposite direction (expecting a movement of 20–25 points in the opposite direction from the level). Pressure on the pair will return today if strong U.S. data is released.Important! Before selling, make sure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1716 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.1695 and 1.1649 can then be expected.

What's on the Chart

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated level where Take Profit orders can be placed or profits can be locked in manually, since further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated level where Take Profit orders can be placed or profits can be locked in manually, since further decline below this level is unlikely;
• MACD Indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions very carefully. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.