Trade Breakdown and Tips for Trading the European Currency

The test of the 1.1745 price level occurred at a moment when the MACD indicator had moved far above the zero line, which limited the pair's upward potential. For this reason, I did not buy the euro.

Eurozone industrial production volume data came out above economists' forecasts. However, the market seemed more focused on the upcoming meeting of the European Central Bank and expectations regarding the future course of monetary policy. Given the recent weak industrial indicators and high inflation in this sector, the report slightly reassured investors who are concerned about the future of the eurozone's manufacturing industry. Nevertheless, U.S. tariff policy, unresolved disputes between EU member states, and high energy prices continue to create an atmosphere of uncertainty.

Later today in the U.S., data on the Empire State Manufacturing Index and the NAHB Housing Market Index will be released. In addition, a public speech by FOMC member John Williams is scheduled. The release of the Empire Manufacturing data will make it possible to assess the state of affairs in the U.S. manufacturing sector. A reading above expectations indicates an increase in manufacturing activity, which usually has a positive impact on the economy and may strengthen the U.S. dollar. The NAHB Housing Market Index, which reflects builders' opinions on the current state of the real estate market, is also important. This indicator is a leading signal of activity in the construction sector and may point to changes in new home construction volumes, mortgage demand, and real estate prices. Positive NAHB data indicate a strong housing market.

The speech by FOMC member John Williams will be closely monitored by investors, as his remarks may shed light on future U.S. Federal Reserve policy. Markets will look for clues regarding the Fed's plans for interest rates, the quantitative easing program that began a couple of days ago, and the overall monetary policy strategy.

As for the intraday strategy, I will rely more on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible if the price reaches the level around 1.1752 (green line on the chart), with a target rise to the 1.1775 level. At 1.1775, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. A strong rise in the euro can be expected as part of the continuation of the bullish market.Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1727 price level at a moment when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reverse upward market reversal. A rise toward the opposite levels of 1.1752 and 1.1775 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1727 level (red line on the chart). The target will be the 1.1701 level, where I plan to exit the market and immediately buy in the opposite direction (targeting a move of 20–25 points in the opposite direction from the level). Pressure on the pair will return today only in the event of a very hawkish stance from Fed representatives. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1752 price level at a moment when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reverse downward market reversal. A decline toward the opposite levels of 1.1727 and 1.1701 can be expected.

What's on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price where Take Profit orders can be placed or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price where Take Profit orders can be placed or profits can be fixed manually, 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 be very cautious when making market entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always place stop-loss orders to minimize losses. Without stop-loss orders, you can lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.