Trade Analysis and Tips for Trading the European Currency

The test of 1.1182 occurred when the MACD indicator had just begun moving downward from the zero line, confirming that the entry point for selling the euro was appropriate. As a result, the pair declined by only 10 points.

The market is preparing for economic data that could determine sentiment toward the dollar in the near term. All attention is focused today on the US labor market report, which is expected to show a significantly better result than a month earlier. In September, job growth was very weak, with only 29,000 jobs added compared with the expected 84,000. At that time, the market immediately reduced its expectations of a Fed rate hike in October, and the dollar lost some of its support. The current forecast points to a recovery, and if this materializes, September's weakness will appear to have been temporary. Average hourly earnings are equally important. Wage growth leads to higher incomes and, consequently, stronger demand, which adds to inflationary pressures. This is why the Fed closely monitors this indicator when deciding whether to raise interest rates further. If wage growth exceeds expectations, expectations of a rate hike in December will strengthen. The University of Michigan Consumer Sentiment Index will provide additional insight into the overall picture by showing how confident US consumers feel amid high prices. Strong data will restore demand for the dollar, increasing pressure on risk-sensitive assets. The euro, which has faced difficulties in recent days, will come under renewed pressure.

As for the intraday strategy, the focus will be primarily on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: The euro can be bought today when the price reaches the level around 1.1182 (the green line on the chart), with a target of reaching 1.1218. At 1.1218, the position will be closed, and the euro will also be sold in the opposite direction, targeting a move of 30–35 points from the entry point. The euro can be expected to rise today if US economic data is weaker than expected. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2: The euro will also be bought today if the price tests 1.1159 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and trigger an upward market reversal. The pair can be expected to rise toward the opposite levels of 1.1182 and 1.1218.

Sell Signal

Scenario #1: The euro will be sold after the price reaches 1.1159 (the red line on the chart). The target will be 1.1124, where the position will be closed and a position in the opposite direction will be opened immediately (targeting a 20–25-point move in the opposite direction from that level). Selling pressure on the pair will return if economic data is stronger than expected. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started declining from it.

Scenario #2: The euro will also be sold today if the price tests 1.1182 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and trigger a downward market reversal. The pair can be expected to decline toward the opposite levels of 1.1159 and 1.1124.

What the Chart Shows:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price level at which Take Profit orders can be placed or profits can be closed manually, as further gains above this level are unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price level at which Take Profit orders can be placed or profits can be closed manually, as further declines below this level are unlikely;
• MACD indicator. When entering the market, it is important to consider the overbought and oversold areas.

Important. Beginner Forex traders should exercise extreme caution when making entry decisions. Before the release of important fundamental reports, it is generally best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If trading during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be lost very quickly, especially when trading large volumes without proper money management.

It is also important to remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.