Trade review and tips for trading the Euro

The price test at 1.1235 occurred after the MACD indicator had already moved well above the zero line, limiting the euro's upside potential. For that reason, I did not buy the euro.

Today the euro continued its rise without a single eurozone release on the calendar, but after updating the weekly high the market began taking profits. The anticipation of US inflation best explains this caution, since the previous prices report was unpleasant for the pair. On October 14, the September index of 0.6% month-on-month and 3.7% year-on-year matched the forecast, yet the dollar still jumped sharply against the euro, and PPI the next day only gave it brief support. Now a slowdown to 0.3% for the headline index and 0.2% for core is expected, so the bar is set lower and any exceedance will be read more harshly than then. Waller and Bowman will also speak today. Waller in early September said he was ready to hold the rate if inflation continued to progress, and later noted that timing is flexible and consecutive hikes are not necessary. If today he and Bowman, who was also considered part of the committee's cautious wing, support a December move and the CPI prints above forecast, euro buyers will lose their last arguments. I believe the pair will continue to decline in that combination.

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

Buy Signal

Scenario No. 1: Today, you can buy the euro when the price reaches around 1.1230 (green line on the chart) with a target of rising to 1.1257. At 1.1257, 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 weak US 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 case of two consecutive tests of 1.1213 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 1.1230 and 1.1257.

Sell Signal

Scenario No. 1: I plan to sell the euro after reaching the 1.1213 level (red line on the chart). The target will be 1.1189, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip move in the opposite direction from the level). Pressure on the pair will return in case of strong data above the forecast. 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 1.1230 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 1.1213 and 1.1189.

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.