Trade review and trading tips for the European currency

The price test at 1.1659 occurred when the MACD indicator was just beginning to move down from the zero line, confirming a valid entry point to sell the euro. As a result, the pair fell by more than 25 pips.

The published US inflation data for December once again confirmed expectations that the Federal Reserve does not plan to cut interest rates in the near term. This circumstance triggered the strengthening of the US currency. Inflation persistently above the target forces the Fed to maintain a conservative stance, which, in turn, affects the dollar's price. This fact will clearly not please the current US president, Donald Trump, who is trying by all means to pressure the central bank, even threatening Fed Chair Jerome Powell with criminal prosecution.

Today, there is no economic data from the eurozone. In the absence of obvious support factors for the euro, it is important to rely on technical analysis, a key tool. A breakout of key resistance levels can trigger a new wave of buying and support upward movement. If buyers are inactive, pressure on the pair will most likely return toward mid-day.

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

Buy scenarios

Scenario No. 1: Today, the euro can be bought around 1.1656 (green line on the chart), with a target of 1.1672. At 1.1672, I plan to exit the market and sell the euro on the rebound, expecting a 30–35-pip move from the entry point. Expect euro growth only within the channel. Important! Before buying, make sure the MACD indicator is above the zero line and is only beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in case of two consecutive tests of 1.1640 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise toward the opposing levels 1.1656 and 1.1672.

Sell scenarios

Scenario No. 1: I plan to sell the euro once it reaches 1.1640 (the red line on the chart). The target will be 1.1621, where I plan to exit the market and buy immediately on the rebound (expecting a 20–25-pip countermove from the level). Pressure on the pair may return quickly today. Important! Before selling, make sure the MACD indicator is below the zero line and is only beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in case of two consecutive tests of 1.1656 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a reversal downward. One can expect a decline toward the opposing levels 1.1640 and 1.1621.

What is on the chart

• Thin green line — entry price at which you can buy the instrument
• Thick green line — suggested Take Profit price or level at which to manually lock in profit, since further rise above this level is unlikely.
• Thin red line — entry price at which you can sell the instrument
• Thick red line — suggested Take Profit price or level at which to manually lock in profit, since further decline below this level is unlikely.
• MACD indicator — when entering the market, it is important to follow the overbought and oversold zones
• Important notes: Beginner forex traders must be very cautious when deciding to enter the market. It is best to be out of the market before major fundamental reports are released to avoid being 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 lose your entire deposit quickly, especially if you do not use money management and trade large volumes.
• Remember that successful trading requires a clear trading plan like the one presented above. Spontaneous trading decisions based on current market noise are a losing strategy for the intraday trader.