Analysis of Trades and Trading Tips for the Euro Currency
The price test at 1.1657 coincided with the MACD indicator moving above the zero mark, confirming the correct entry point for buying euros. As a result, the pair rose by 20 pips.
The euro rose sharply, while the dollar lost ground after news emerged that US and Iranian negotiators had agreed to a peace deal. This news undoubtedly could have triggered significant fluctuations in the currency market. The agreement on a peace deal between the two countries, especially after a prolonged period of tension, is perceived as a positive signal for the global economy. It may reduce geopolitical risks, which, in turn, positively affects appetite for risk. In such a situation, traders may prefer riskier assets, selling dollars and buying euros.
Today, in the first half of the day, the pair will likely respond to data on the Eurozone unemployment rate and the manufacturing PMI. These macroeconomic indicators are key barometers of the European economy, and their publication could trigger significant fluctuations in the currency market. Investors and traders will closely examine the numbers to evaluate the current economic situation and forecast the European Central Bank's next steps. The unemployment rate in the Eurozone is a crucial social and economic indicator. A decrease in the unemployment rate is traditionally viewed as a sign of an improving economy, rising consumer demand, and consequently, increased inflationary pressure.
The PMI index for the manufacturing sector, in turn, reflects the activity levels in the manufacturing sector, which is one of the pillars of the European economy. Values above 50 indicate an expansion in manufacturing activity, while values below 50 signal a contraction. High PMI readings indicate increased production volumes, new orders, and employment, which are positive signs for the economy. Conversely, low readings may indicate problems and risks.
Regarding the intraday strategy, I will primarily rely on implementing scenarios #1 and #2.
Buying Scenarios:
Scenario #1: Today, I plan to buy euros when the price reaches around 1.1670 (green line on the chart), targeting a move to 1.1605. At point 1.1605, I plan to exit the market and sell euros back, expecting a move of 30-35 pips from the entry point. A rise in the euro value can only be anticipated after good data from the Eurozone. Importantly! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy euros today if the price tests 1.1647 twice in a row while the MACD indicator is in oversold territory. This will limit the downward potential of the pair and lead to an upward market reversal. We can expect a rise to the opposite levels 1.1670 and 1.1705.
Selling Scenarios:
Scenario #1: I plan to sell euros once the level 1.1647 (red line on the chart) is reached. The target will be the level 1.1608, where I plan to exit the market and immediately buy back in the opposite direction (expecting a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair today will only return in the case of weak data. Importantly! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its descent from it.
Scenario #2: I also plan to sell euros today if the price tests 1.1670 twice in a row while the MACD indicator is in overbought territory. This will limit the upward potential of the pair and lead to a market reversal downward. Expect a decrease to the opposite levels of 1.1647 and 1.1608.
What's on the Chart:
Thin green line – entry price for buying the trading instrument;
Thick green line – presumed price level for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
Thin red line – entry price for selling the trading instrument;
Thick red line – presumed price level for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
MACD Indicator. When entering the market, it is important to consider the overbought and oversold zones.
Important: Beginner traders in the Forex market must be very cautious when making entry decisions. Before major fundamental reports are released, it is best to stay out of the market to avoid being caught in sharp fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you are not using money management and are trading large volumes.
And remember, for successful trading, you need a clear trading plan similar to the one presented above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.
