Analysis of Trading Setups and Tips for Trading the Euro

The test of the 1.1073 price level occurred when the MACD indicator had just begun moving downward from the zero line. This confirmed a valid entry point for selling the euro, but the expected decline in the pair never materialized.

The euro's current rebound following the ECB bulletin appears to be technical rather than fundamental. The document confirmed that inflation reached 3.8% in September, energy prices remain the main source of inflationary pressure, and inflation risks are tilted to the upside. None of this is new information for the market. At the same time, the regulator acknowledged that financial conditions have tightened, demand for loans has declined, and risks to economic growth are tilted to the downside. This combination provides no basis for a sustained euro recovery, as it merely confirms the scenario already priced in by the market: one rate hike in December, with no commitment to further increases.

The euro will now face the impact of US economic events in the second half of the day. Weekly jobless claims are expected to reach 195K, indicating that the US labor market remains resilient. Existing home sales for October are forecast at 3.87M, compared with 3.99M in the previous month. However, the speeches by FOMC members Hammack, Barr, Goolsbee, and Daly will be much more important, as the market has already priced in a 96% probability of a December rate hike. Any hawkish remarks could further strengthen these expectations.

Looking at previous developments, Hammack voted in favor of a rate hike on October 28 and spoke in support of restrictive monetary policy on November 5. Her rhetoric has not changed since then. Lagarde is scheduled to speak in the evening, but until then, the dollar may have an opportunity to strengthen its position. If Fed officials make hawkish comments, demand for the US currency is likely to return, while the euro will remain under downward pressure.

As for the intraday trading strategy, greater emphasis will be placed on implementing Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, the euro can be bought when the price reaches the 1.1105 level (the green line on the chart), with an upward target of 1.1129. At 1.1129, the position can be closed, and a short position can be opened in the opposite direction, targeting a 30–35-point move from the entry point. The euro could appreciate today if US economic data comes in weaker than expected. Important! Before buying, make sure that the MACD indicator is above the zero line and has just started moving upward from it.

Scenario #2: The euro can also be bought today if the price tests the 1.1089 level twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and could trigger an upward market reversal. An increase toward the opposite levels of 1.1105 and 1.1129 can then be expected.

Sell Signal

Scenario #1: The euro can be sold after the price reaches 1.1089 (the red line on the chart). The target will be 1.1065, where the position can be closed and a long position opened immediately in the opposite direction, targeting a 20–25-point move upward from that level. Selling pressure on the pair is likely to return if US economic data exceeds expectations. Important! Before selling, make sure that the MACD indicator is below the zero line and has just started moving downward from it.

Scenario #2: The euro can also be sold today if the price tests the 1.1105 level twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and could trigger a downward market reversal. A decline toward the opposite levels of 1.1089 and 1.1065 can then be expected.

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 a Take Profit order can be placed or profits can be closed manually, as further upward movement above this level is unlikely.
• Thin red line – the entry price at which the trading instrument can be sold.
• Thick red line – the estimated price level at which a Take Profit order can be placed or profits can be closed manually, as further downward movement below this level is unlikely.
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should exercise extreme caution when making entry decisions. It is generally best to stay out of the market ahead of major fundamental data releases to avoid exposure to sharp price 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 if proper money management is not applied and large position sizes are used.

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 an unsuccessful strategy for an intraday trader.