Trade Analysis and Tips for Trading the Euro

The price test at 1.1409 coincided with the moment when the MACD indicator was just beginning to move upward from the zero mark, confirming the correct entry point for buying the euro. As a result, the pair rose toward the target level of 1.1440.

Yesterday, the dollar declined in response to U.S. inflation news. The core inflation figure was particularly striking in the June report, bringing the Federal Reserve closer to its long-standing goal. The core Consumer Price Index excludes volatile food and energy prices and is considered the most accurate indicator of sustained price pressure, which is why the market pays close attention to it. On a month-on-month basis, it showed no change, coming in at zero compared to an expected 0.2 percent, while year-on-year it slowed to 2.6 percent against a forecast of 2.8 percent. Thus, core inflation has come close to the 2 percent target, a level not seen in a long time. The single currency took advantage of this dollar weakness. The proximity of inflation to the target increased expectations for a softer path from the Fed, reducing the appeal of the U.S. dollar and opening up room for EUR/USD to rise.

Today, the euro enters the first half of the day with a focus on the publication of Eurozone industrial production data, which will serve as a key benchmark for the session. Industrial production measures how much output factories in the region produce and is a key indicator of economic activity, as its growth signals business confidence and supports the euro through expectations of European Central Bank policy. For the market, the most important aspect is the deviation of the actual figure from the forecast, as it determines the strength of the reaction. Should the data come in strongly, the euro will have a chance for renewed growth against the dollar, and the EUR/USD pair may develop an upward trend throughout the European session.

Regarding the intraday strategy, I will primarily rely on the implementation of scenarios #1 and #2.

Buy Scenarios

Scenario #1: I plan to buy euros today when the price reaches around 1.1449 (green line on the chart), targeting a rise to 1.1477 (thicker green line on the chart). At around 1.1477, I plan to exit the market and sell back immediately (expecting a movement of 30-35 pips in the opposite direction from the entry point). We can anticipate growth in the euro today only if good data are released. Important! Before buying, ensure that the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy euros today if there are two consecutive tests of 1.1433 while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. We can expect a rise to the opposite levels of 1.1449 and 1.1477.

Sell Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1433 (the red line on the chart). The target will be 1.1407, where I intend to exit the market and immediately buy back (expecting a move of 20-25 pips in the opposite direction from that level). Pressure on the pair will return today in the event of poor data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell euros today if there are two consecutive tests of 1.1449 while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. We can expect a decline to the opposite levels of 1.1433 and 1.1407.

What the Chart Shows:

• The thin green line represents the entry price for buying the trading instrument;
• The thick green line is the estimated price at which to set Take Profit or lock in profits, as further upward movement is unlikely above this level;
• The thin red line is the entry price for selling the trading instrument;
• The thick red line is the estimated price at which to set Take Profit or lock in profits, as further downward movement is unlikely below this level;
• The MACD indicator. It is important to base market entries on overbought and oversold zones.

Important: Beginning traders in the Forex market must make entry decisions very cautiously. Before the release of significant fundamental reports, it is best to stay out of the market to avoid sudden price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without 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 necessary to have a clear trading plan, similar to the one I have presented above. Making spontaneous trading decisions based on the current market situation is fundamentally a losing strategy for intraday traders.