Trade Review and Tips for Trading the European Currency

The price test at 1.1213 occurred when the MACD indicator moved well below the zero line, limiting the pair's downside potential. For that reason, I did not sell the euro and missed the move down.

The euro continued to fall against the dollar after Austan Goolsbee called the October inflation report another worrying, nearly alarming, release and emphasized that officials will have to fight elevated prices. He expected tariffs and expensive energy to stop driving inflation by now, but there has been no progress, and he sees persistently high services inflation as the report's most troubling part. Goolsbee's stance is noticeably firmer than before. Previously, he allowed for either a hike or a pause; on November 9, he called inflation the main problem and compared AI investment booms to overheated demand; now he speaks of alarming data. The numbers themselves confirm his concerns: the core index rose 0.3% vs. a 0.2% forecast, and the headline rose 0.4% vs. a 0.3% forecast. The market already prices in a small chance of a 50-bp hike in December and additional steps in 2027.

Many eurozone data and speeches are expected in the first half of the day, and they will determine whether the euro's decline versus the dollar continues. First, Germany's consumer-price index and Italy's industrial production will be released, then Bundesbank President Joachim Nagel and European Central Bank President Christine Lagarde will speak. Nagel will attract the most attention because his stance on rates has become clearer. Recently, he said new steps cannot be ruled out. Nagel is among those supporting a December hike — in other words, he has moved from a cautious formula to backing a specific decision.

After the October 29 pause, Lagarde said the council discussed whether a hike was appropriate but decided to wait. About December, she added that, barring major shocks, the direction of travel is fairly clear. For the market, it is important whether she will confirm that stance, since the deposit rate of 2.50% and a rise to 2.75% on December 17 are already priced in, and new hints about further steps could support the euro.

German inflation is forecast to slow to 2.8% year-on-year from 3.3% in September, while Italian industrial production is expected to rise 1.0% after a 1.3% decline. That is why I believe only very high inflation, together with a hawkish tone from policymakers, can stop the euro's fall versus the dollar; with weak data, the euro will have no chance.

For intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Scenarios to Buy

Scenario No. 1: Today you can buy the euro when the price reaches around 1.1169 (green line on the chart), targeting 1.1193. At 1.1193, I plan to exit the market and also sell the euro in the opposite direction, expecting a 30–35 pip move from the entry point. Expect euro strength today only after good data. Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also intend to buy the euro today in the event of two consecutive tests of 1.1151 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. You can expect a rise to the opposite levels of 1.1169 and 1.1193.

Scenarios to Sell

Scenario No. 1: I plan to sell the euro after the 1.1151 level is reached (red line on the chart). The target will be 1.1113, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip move away from the level). Pressure on the pair will return if data is weak. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also intend to sell the euro today in the event of two consecutive tests of 1.1169 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. You can expect a decline to the opposite levels of 1.1151 and 1.1113.

What's on the Chart:

Thin green line – the entry price at which you can buy the trading instrument;

Thick green line – the suggested price where you can place a Take Profit or manually lock in gains, since further upside above this level is unlikely;

Thin red line – the entry price at which you can sell the trading instrument;

Thick red line – the suggested price where you can place a Take Profit or manually lock in gains, since further downside below this level is unlikely;

MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.

Important. Beginner Forex traders must be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember, successful trading requires a clear trading plan, like the example I presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for an intraday trader from the start.