Trade Review and Tips for Trading the European Currency

The test of the 1.1815 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

Despite strong IFO index reports from Germany, the European currency showed caution. Investors are likely concerned about the broader economic context, including trade tariffs and the geopolitical conflict between the United States and Iran, which may offset positive signals from an individual country. Germany's business expectations, although improved, still indicate some uncertainty about future prospects. Business surveys reflect not only current conditions but also future sentiment, and in the case of IFO, even with improvement, the readings remain at levels that do not inspire strong optimism.

Later in the day, the market expects the release of U.S. data on factory orders, as well as a speech by Christopher Waller, a member of the Federal Open Market Committee. Any deviation from forecast figures could trigger short-term volatility. Particular attention will be paid to Waller's remarks. As a member of the Federal Reserve leadership, he may provide hints about future changes in monetary policy. Traders closely analyze his statements for signals that could reshape expectations regarding the Fed's next steps. Amid current market uncertainty, with GDP growth having slowed sharply, even slightly dovish comments from central bank officials could provoke a dollar sell-off.

As for the intraday strategy, I will primarily rely on implementing Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible upon reaching the 1.1807 level (green line on the chart), with a target of 1.1831. At 1.1831, I plan to exit the market and also consider selling in the opposite direction, targeting a 30–35 point move from the entry point. Strong euro growth can only be expected after weak U.S. data.Important: Before buying, make sure the MACD indicator is above the zero line and 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 1.1793 level when the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.1807 and 1.1831 can then be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after it reaches the 1.1793 level (red line on the chart). The target will be 1.1769, where I intend to exit the market and immediately buy in the opposite direction (targeting a 20–25 point move from that level). Pressure on the pair will return in the event of strong U.S. data.Important: Before selling, make sure the MACD indicator is below the zero line and 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 1.1807 level when the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward reversal. A decline toward the opposite levels of 1.1793 and 1.1769 can then be expected.

Chart Explanation

• Thin green line – entry price for buying the trading instrument.
• Thick green line – estimated Take Profit level or area to manually lock in profits, as further growth above this level is unlikely.
• Thin red line – entry price for selling the trading instrument.
• Thick red line – estimated Take Profit level or area to manually lock in profits, as further decline below this level is unlikely.
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important

Beginner Forex traders should make market entry decisions with extreme caution. It is best to stay out of the market before major fundamental reports are released to avoid sharp price swings. If you decide to trade during news releases, always place stop-loss orders to minimize potential losses. Without stop-loss orders, you can quickly lose your entire deposit—especially if you do not use proper money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the one outlined above. Spontaneous decisions based solely on the current market situation are inherently a losing strategy for intraday traders.