Trade Analysis and Trading Tips for the Euro

The test of 1.1460 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.

The euro came under pressure amid political news from Germany, where Chancellor Friedrich Merz announced his intention to remain in office despite his party suffering its largest-ever defeat in state elections. The result dealt a significant blow to Merz's position just 16 months after he took office, and voices are already emerging among rank-and-file party members calling for his resignation. For the single currency, such political instability in the eurozone's largest economy represents an additional risk factor at a time when the euro already appears vulnerable.

The key events in the second half of the day will not be the Richmond Fed Manufacturing Index data, but rather speeches by three FOMC members — John Williams, Tom Barkin, and Philip Jefferson. The market has clearly shifted its focus from routine economic data to official rhetoric, which is understandable: following a unanimous 25-basis-point rate hike and a notable upward revision to forecasts, it is much more important to understand how sustainable this hawkish stance is within the committee itself. If today's speakers confirm their readiness to continue in the same direction, the dollar, in my view, will have an additional reason to strengthen its already substantial gains from yesterday. Given that John Williams has maintained a relatively cautious tone regarding the inflation trend in recent weeks, his comments today are particularly interesting: any shift away from his previous caution toward more hawkish language could push EUR/USD noticeably lower.

As for the intraday strategy, I will focus more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches the area around 1.1478 (the green line on the chart), with a target of 1.1502. At 1.1502, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. Any rise in the euro today can be expected only as part of a correction. Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today if the price tests 1.1452 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal to the upside. A rise toward the opposite levels of 1.1478 and 1.1502 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches 1.1452 (the red line on the chart). The target will be 1.1425, where I plan to exit the market and immediately buy in the opposite direction, targeting a move of 20–25 points in the opposite direction from the level. Downward pressure on the pair may return at any time. Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today if the price tests 1.1478 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal to the downside. A decline toward the opposite levels of 1.1452 and 1.1425 can be expected.

What Is Shown on the Chart:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the expected price at which Take Profit orders can be placed or profits can be closed manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the expected price at which Take Profit orders can be placed or profits can be closed manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to take the overbought and oversold areas into account.

Important. Beginner Forex traders need to be very cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to remain out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.