Trade Analysis and Tips for Trading the Euro

The price test at 1.1485 occurred as the MACD indicator was beginning to move down from the zero mark, confirming the right entry point to sell the euro. As a result, the pair fell toward the target mark of 1.1463. However, the dollar's growth was short-lived, and by the end of the session, the American currency gave back its gains against the euro. In the first half of the day, the pair's decline was driven by weak labor market data from Germany and inflation data in the Eurozone. Nevertheless, the euro managed to recover. As soon as the impact of the European data dissipated, risk appetite began to recover, and the EUR/USD pair regained lost ground.

Today, the euro enters the first half of the day with a focus on July data for Germany's manufacturing sector and the Eurozone. The Purchasing Managers' Index (PMI) in manufacturing is considered a leading indicator, as it is among the first to capture changes in business sentiment, and its dynamics directly influence expectations for the European Central Bank's interest rate and, through them, the euro's exchange rate. Since the revised data has been published, the key will be the direction of the revision relative to the initial values. An upward revision could help the euro continue to rise against the dollar. Until the data is released, the euro is likely to remain restrained, and the pair's direction will be determined by how closely the revised figures align with market expectations.

Regarding intraday strategy, I will rely more on implementing scenarios No. 1 and No. 2.

Buying Scenarios

Scenario No. 1: Today, buying the euro can be considered when the price reaches around 1.1540 (green line on the chart), targeting a move toward 1.1574. At point 1.1574, I plan to exit the market and sell the euro back, expecting a movement of 30-35 pips from the entry point. Growth for the euro can only be expected after good data. Important! Before buying, make sure that the MACD indicator is above the zero mark and is just starting to rise from it.

Scenario No. 2: I also plan to buy the euro today if there are two consecutive tests of 1.1523 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. An increase can be expected towards the opposing levels of 1.1540 and 1.1574.

Selling Scenarios

Scenario No. 1: I plan to sell the euro once it reaches 1.1523 (the red line on the chart). The target will be 1.1500, where I plan to exit the market and immediately buy back in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair today will return in case of poor data. Important! Before selling, make sure that the MACD indicator is below the zero mark and is just starting to decline from it.

Scenario No. 2: I also plan to sell the euro today if there are two consecutive tests of 1.1540 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decrease can be expected towards the opposing levels of 1.1523 and 1.1500.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.