Trade Analysis and Tips for Trading the Euro

The test of 1.1422 came at a time when the MACD indicator had moved significantly lower from the zero mark, limiting the pair's downside potential. For this reason, I did not sell the euro. The second test at 1.1422 led to the implementation of scenario #2 for buying the euro, resulting in a 15-pip rise in the pair.

The escalation around the Strait of Hormuz has once again restored the dollar's status as a safe haven and pressured the euro. Over the past weekend, American forces conducted one of the most intense bombardments since the June ceasefire agreement, hitting about 140 targets on Saturday and adding a new round of strikes on Iranian air defense and missile systems on Sunday. In such a situation, the single currency loses its support. The rise in geopolitical tensions forces traders to shift from riskier assets to the dollar, and the EUR/USD pair declines as heightened risk is priced in.

Today, there are no Eurozone data scheduled in the first half of the day, so do not be surprised if pressure on the euro persists. The market is likely to rely on overall market sentiment and oil price dynamics. Given the absence of significant macroeconomic events, traders will closely monitor any statements from European Central Bank representatives.

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

Buy Scenarios

Scenario #1: Today, I can buy the euro at around 1.1409 (green line on the chart), with a target of 1.1438. At 1.1438, I plan to exit the market and sell the euro back, expecting a movement of 30-35 pips from the entry point. We can anticipate an increase in the euro only after good data are released. Important! Before buying, ensure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the euro today if there are two consecutive tests of 1.1391 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 1.1409 and 1.1438.

Sell Scenarios

Scenario #1: I plan to sell the euro once it reaches 1.1391 (the red line on the chart). The target will be 1.1365, where I plan 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 case of poor data. Important! Before selling, ensure the MACD indicator is below the zero mark and just beginning to decline from it.

Scenario #2: I also plan to sell the euro today if there are two consecutive tests of 1.1409 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 at 1.1391 and 1.1365.

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.