Trade Review and Tips for Trading the Euro

The price test at 1.1487 coincided with the moment when the MACD indicator was just starting to move up from the zero mark, confirming it as a valid entry point to buy the euro. As a result, the pair rose to the target level of 1.1529.

The slowdown in the US economy set the tone for yesterday's trading, extending the dollar's decline. The gross domestic product, adjusted for inflation, grew by only 1.5% year-on-year for the second quarter after a preliminary estimate of 2.1%, and the core personal consumption expenditure index increased by just 0.1% in June compared to 0.3% in May. Both indicators are significant as they together paint a picture of cooling in the economy and inflation, prompting the Federal Reserve to adopt a more cautious stance, which deprived the dollar of support. The euro capitalized on this weakness. Slowing growth and inflation in the US heightened expectations for a softer policy stance, lowered yields on US bonds, and increased the euro's appeal, driving the EUR/USD pair higher.

Today, unemployment data for Germany and the Eurozone consumer price index are expected in the first half of the day. The unemployment rate in Germany always attracts significant attention. It is expected that the figure will remain stable or even show a slight decrease. If the data comes in better than expected, it will be a strong signal for the market, confirming the resilience of the German economy.

Inflation in the Eurozone also remains one of the key drivers of the European Central Bank's monetary policy. Positive data from the consumer price index, indicating moderate inflation growth, could strengthen the euro's position, hinting at a tighter future policy stance from the ECB. The combination of these factors will create a favorable environment for the euro's appreciation. Positive economic signals could not only halt the current Asian correction but also act as a catalyst for a new upward trend.

As for the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

• Scenario #1: Today, I plan to buy euros when the price reaches around 1.1517 (green line on the chart) with a target rise to 1.1545. At 1.1545, I plan to exit the market and sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. One can expect euro growth only after good data. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning to rise from it.
• Scenario #2: I also plan to buy euros today if there are two consecutive tests of the price at 1.1501 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal in the market. A rise to the opposite levels of 1.1517 and 1.1545 can be expected.

Selling Scenarios

• Scenario #1: I plan to sell euros once the price reaches 1.1501 (the red line on the chart). The target will be 1.1474, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today if poor data are released. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning to decrease from it.
• Scenario #2: I also plan to sell euros today if there are two consecutive tests of 1.1517 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decrease to the opposite levels of 1.1501 and 1.1474 can be anticipated.

What's on the Chart:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price for placing Take Profit or manually securing profits, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price for placing Take Profit or manually securing profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by the zones of overbought and oversold.

Important: New traders in the Forex market should make decisions about market entry very cautiously. Before the release of important fundamental reports, it is best to stay out of the market to avoid sharp fluctuations in the exchange rate. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade with large volumes.

And remember, for successful trading, it is essential to have a clear trading plan, like the one outlined above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for intraday traders.