Trade Analysis and Trading Tips for the European Currency

The test of the 1.1228 price level occurred when the MACD indicator had just started moving downward from the zero line, confirming a valid entry point for selling the euro. As a result, the pair declined by 15 points.

The sudden return of demand for the US dollar pushed the euro lower. Just the day before, the single currency had been holding up thanks to the weakness of the US dollar, but strong US labor market data and remarks by Beth Hammack of the Federal Reserve changed the outlook. The FOMC member emphasized that inflation has remained above the target for almost six years and that monetary policy will need to become restrictive. She also stated that she prefers to take smaller steps more frequently. This is the same message she delivered in October, when the euro hit new monthly lows following her remarks. It confirms that the Fed has no intention of stopping, while a rate hike in December remains the baseline scenario.

Today, euro buyers will find it difficult to count on support from Europe. German industrial production and eurozone retail sales figures will be released in the first half of the day, and forecasts for both indicators are disappointing. For comparison, German industrial production jumped by 2.0% in August, whereas a 0.2% decline is now expected. Eurozone retail sales increased by 0.1% month over month in August after falling by 0.6% in July, while the market is now expecting another 0.1% decline. Annual retail sales growth is also expected to slow to 0.6% from 0.8%. If the data disappoint, pressure on the euro will only intensify.

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

Buy Scenarios

Scenario #1: Today, the euro can be bought when the price reaches the 1.1202 level (the green line on the chart), with a target of 1.1230. At 1.1230, the position will be closed, and the euro will also be sold in the opposite direction, targeting a 30–35-point move from the entry point. The euro can only be expected to rise today if the economic data are positive. 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 considered for buying today if the price tests the 1.1182 level twice consecutively while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and trigger an upward market reversal. A rise toward the opposite levels of 1.1202 and 1.1230 can then be expected.

Sell Scenarios

Scenario #1: The euro will be considered for selling after the price reaches the 1.1182 level (the red line on the chart). The target will be 1.1154, where the position will be closed and a buy position opened immediately in the opposite direction, targeting a 20–25-point move in the opposite direction from that level. Downward pressure on the pair will return if the economic data are weak. 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 considered for selling today if the price tests the 1.1202 level twice consecutively while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and trigger a downward market reversal. A decline toward the opposite levels of 1.1182 and 1.1154 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 Take Profit orders can be placed or profits can be taken manually, as further upside beyond 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 Take Profit orders can be placed or profits can be taken manually, as further downside beyond 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 best to stay out of the market ahead of major fundamental data releases 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 balance can be lost very quickly, especially when using large position sizes without proper money management.

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 an intraday trader.