The price test at 1.1147 occurred as the MACD indicator began moving up from zero, confirming a valid entry point to buy the euro. As a result, the pair rose
The price test at 1.1147 occurred as the MACD indicator began moving up from zero, confirming a valid entry point to buy the euro. As a result, the pair rose toward the target area of 1.1179.
After the U.S. data, the euro got a breather. U.S. Q3 GDP showed a strong economy — 3.4% year-on-year versus 2.2% in Q2 and a 3.2% forecast, the fastest pace in a year — while the core Personal Consumption Expenditures index for September matched forecasts with a 0.5% monthly rise. Core PCE excluding food and energy was 0.3% month-on-month as expected (previously 0.2%). That is a comfortable picture for the Federal Reserve, and Kevin Warsh did not promise a December hike. Yesterday the European Central Bank left the main rate at 2.65%, and the deposit rate at 2.50% as expected, and a December hike to 2.75% remains the economists' baseline.
Today the market's attention is on Europe because of a dense release schedule. First we expect euro-area Q3 GDP (consensus +0.2% q/q versus +0.6% prior; +1.1% y/y versus +1.2% prior), then the unemployment rate (expected steady at 6.4%), and then October inflation for Germany and France. German CPI is forecast at +0.1% month-on-month and 3.0% year-on-year (prior +0.6% m/m and 3.3% y/y); French CPI is forecast +0.2% m/m and +0.3% HICP m/m after -0.3% previously. Each figure adds detail to the overall picture of growth and prices in the euro area. I think softer German inflation and slowing GDP could limit euro upside, while a hawkish tone from Lane could give EUR/USD support.
For intraday strategy, I will mainly rely on Scenarios No. 1 and No. 2.
Scenario No. 1: Today, it is possible to buy the euro around 1.1195 (green line on the chart), targeting a rise to 1.1225. At 1.1225, I plan to exit the market and also sell the euro in the opposite direction, expecting a 30–35-pip move from the entry point. You can count on euro upside today only after good data. Important! Before buying, make sure the MACD indicator is above zero and is just beginning to rise from it.
Scenario No. 2: I also intend to buy the euro today if 1.1181 is tested twice consecutively while the MACD indicator is in the oversold area. That will limit the pair's downside potential and trigger an upward reversal. One can expect a rise to the opposite levels of 1.1195 and 1.1225.
Scenario No. 1: I plan to sell the euro after it reaches 1.1181 (red line on the chart). The target is 1.1160, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25-pip move from that level). Pressure on the pair will return if data is weak. Important! Before selling, make sure the MACD indicator is below zero and is just beginning to fall from it.
Scenario No. 2: I also intend to sell the euro today in the event of two consecutive tests of 1.1195 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline to the opposite levels of 1.1181 and 1.1160.
Thin green line — entry price where you can buy the instrument.
Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.
Thin red line — entry price where you can sell the instrument.
Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.
MACD indicator. When entering the market, it's important to consider overbought and oversold zones.
Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.
Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.
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