Trade Analysis and Tips for Trading the European Currency

The price test at 1.1591 occurred as the MACD indicator began to move downward from the zero mark, confirming the correct entry point to sell the euro. As a result, the pair declined by 20 pips.

A strong manufacturing report from New York set the tone for afternoon trading and supported the dollar. The Empire State index rose to 20.6, reflecting the highest business activity in the state's manufacturing sector in recent years. Since this indicator is one of the first to capture the state of the sector, its sharp increase convinced the market of the economy's resilience, thereby benefiting the U.S. currency. Against this backdrop, the euro lost ground. Strong data reinforced arguments for a more hawkish Federal Reserve policy and increased demand for the dollar, driving the EUR/USD pair down.

The euro enters the first half of the day targeting the ZEW indices, which cover business sentiment in Germany and the Eurozone, as well as the current situation assessment. These are considered leading indicators, as they are based on surveys of experts and are the first to capture shifts in economic sentiment. Their significance increases when compared to previous values. The dynamics compared to last month will indicate whether optimism is gaining strength or beginning to wane. Much will depend on how the fresh data correlates with past assessments and forecasts.

Regarding the intraday strategy, I will focus more on scenarios No. 1 and No. 2.

Buy Scenarios

• Scenario No. 1: Today, I can buy euros when the price reaches around 1.1580 (the green line on the chart), targeting a rise to 1.1609. At 1.1609, I plan to exit the market and sell the euro in the opposite direction, expecting a move of 30-35 pips from the entry point. The growth of the euro can be expected to continue in line with the trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just starting its rise from it.
• Scenario No. 2: I also plan to buy euros today in the event of two consecutive tests of 1.1565 when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards the opposite levels of 1.1580 and 1.1609.

Sell Scenarios

• Scenario No. 1: I plan to sell euros once the price reaches 1.1565 (the red line on the chart). The target will be 1.1538, where I intend 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 today will return if weak data are released. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just starting its decline from it.
• Scenario No. 2: I also plan to sell euros today in the event of two consecutive tests of 1.1580 when the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. A decline can be expected towards the opposite levels of 1.1565 and 1.1538.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.