Analysis of Trades and Tips for Trading the Euro
The test of the price at 1.1903 occurred when the MACD indicator had moved significantly below the zero mark, which limited the euro's downside potential. For this reason, I did not sell euros. The second test at 1.1903 coincided with the MACD recovering from oversold territory, allowing the realization of Scenario #2: buying euros. As a result, the pair rose by more than 20 pips.
The December retail sales reports from the United States, which showed negative dynamics, had a notable impact on the American currency, supporting the euro's growth in the second half of the day. The slowdown in retail sales growth may signal a weakening of consumer demand, which negatively affects key macroeconomic indicators. Given that consumer spending is a significant component of US GDP, any slowdown in this area requires close attention.
Today, data on Italy's industrial production volume is expected in the first half of the day. This indicator, which serves as a barometer of manufacturing activity, is particularly important given Italy's status as one of the leading economies in the Eurozone. The industrial sector is fundamental to any developed economy, reflecting not only production volumes but also employment levels, investment, and its influence on GDP. The publication of today's results will allow an assessment of the manufacturing sector's ability to withstand current macroeconomic challenges, and good data will likely positively impact the value of the euro. However, one should not expect a strong market reaction to this data, as significant labor market data from the US are on the horizon.
Regarding the intraday strategy, I will primarily rely on implementing Scenarios #1 and #2.
Buy Scenarios
Scenario #1: Today, I plan to buy euros upon reaching the entry point around 1.1927 (green line on the chart), targeting a move to 1.1947. At the level of 1.1947, I intend to exit the market and also sell euros in the opposite direction, anticipating a movement of 30-35 pips from the entry point. One can expect the euro to grow today within the overall upward trend. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting to rise from it.
Scenario #2: I also plan to buy euros today if the price tests 1.1907 twice in a row while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to an upward market reversal. An increase towards the opposing levels of 1.1927 and 1.1947 can be expected.
Sell Scenarios
Scenario #1: I plan to sell euros today after reaching 1.1907 (red line on the chart). The target will be at 1.1885, where I intend to exit the market and immediately buy in the opposite direction (anticipating a movement of 20-25 pips in the opposite direction from the level). Pressure on the pair today is expected to return as part of a small correction. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting to decline from it.
Scenario #2: I also plan to sell euros today if the price tests 1.1927 twice in a row while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a downward market reversal. A decrease to the opposing levels of 1.1907 and 1.1885 can be expected.
What's on the Chart:
The thin green line represents the entry price at which one can buy the trading instrument;
The thick green line represents the approximate price where one can set Take Profit or secure profits, as further growth above this level is unlikely;
The thin red line represents the entry price at which one can sell the trading instrument;
The thick red line represents the approximate price where one can set Take Profit or secure profits, as further decline below this level is unlikely;
The MACD indicator: when entering the market, it is important to consider overbought and oversold zones.
Important: Beginner traders in the Forex market should be very careful when making entry decisions. It is best to stay out of the market before important fundamental reports are released to avoid getting caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.
And remember, for successful trading, it is essential to have a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for an intraday trader.
