Trade Analysis and Tips for the Euro

The first test of the 1.0402 level occurred when the MACD indicator had moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy the euro. The second test of 1.0402 happened shortly after, with the MACD in the overbought area, confirming a correct entry point for Scenario #2 (sell trade). However, the pair did not decline, resulting in a loss.

Despite Eurozone services activity data not fully meeting economist expectations, the fact that the composite PMI remained above 50 points helped sustain positive sentiment among euro buyers, leading to another EUR/USD rally in the first half of the day.

A series of U.S. economic reports is scheduled for release, which could trigger significant market volatility. The ISM Services PMI data will provide insights into the overall economic outlook. Weaker-than-expected data could indicate an economic slowdown, prompting a sell-off in the dollar as investors shift toward alternative assets like the euro. Strong ADP employment data could boost the U.S. dollar, reinforcing expectations that the Federal Reserve will maintain a tight monetary policy.

This interaction between economic data and monetary policy will be a key driver for currency movements.

For intraday strategy, I will focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buy EUR/USD at approximately 1.0439 (green line on the chart) with a target of 1.0486. Exit the trade at 1.0486 and open a sell position in the opposite direction, expecting a 30-35 point retracement. Expect EUR/USD to rise only if U.S. data is weak.

Important: Before buying, ensure that MACD is above the zero mark and starting to rise.

Scenario #2: Buy EUR/USD after two consecutive tests of 1.0402, if MACD is in the oversold zone. This will limit the downward potential and lead to a market reversal upward.Targets: 1.0439 and 1.0486.

Sell Signal

Scenario #1: Sell EUR/USD at 1.0402 (red line on the chart) with a target of 1.0359. Exit the trade and open buy positions in the opposite direction (expecting a 20-25 point retracement). Selling pressure may return at any time, especially after strong U.S. data.

Important: Before selling, ensure that MACD is below the zero mark and starting to decline.

Scenario #2: Sell EUR/USD after two consecutive tests of 1.0439, if MACD is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. Targets: 1.0402 and 1.0359.

Chart Key:

• Thin green line – Entry price for buying the instrument.
• Thick green line – Projected take-profit level (higher growth unlikely beyond this point).
• Thin red line – Entry price for selling the instrument.
• Thick red line – Projected take-profit level (further decline unlikely beyond this point).
• MACD Indicator – Monitor overbought/oversold conditions before entering trades.

Important Notes for Beginner Forex Traders:

Be cautious when entering the market, especially before major economic reports. It is best to stay out of the market before high-impact fundamental data to avoid sudden price swings. If trading during news releases, always set stop-loss orders to minimize losses. Without stop-loss orders, you can quickly lose your entire deposit, particularly if trading with high leverage.

Successful trading requires a clear strategy, like the one outlined above. Avoid spontaneous trading decisions, as trading based on short-term market fluctuations is a losing strategy for intraday traders.