Trade Analysis and Tips for Trading the Euro

The price test at 1.1547 occurred after the MACD indicator had already moved significantly above the zero mark, limiting the pair's upward potential. For this reason, I did not buy euros.

A calm report on the real estate market set a restrained tone for trading yesterday in the absence of other significant reports and comments from the Federal Reserve. Sales of existing homes in the US fell by 1.7% in July, but maintained a growth of 2.4% since the beginning of the year; the result nearly matched forecasts. This indicator reflects demand in the real estate segment and helps assess the impact of high rates on consumers. Still, its alignment with expectations did not give the market a reason to move sharply. Under such conditions, the single currency remained influenced by external factors. With no surprises in the data, the dollar had no new impetus, and the EUR/USD pair moved sluggishly, driven by overall sentiment. Until significant drivers emerge, the initiative regarding the euro is primarily determined by the behavior of the American currency, and the alignment of data with forecasts merely solidified the market's reduced volatility.

Today, the euro enters the first half of the day aiming for the final assessments of consumer inflation in Italy and Germany. Inflation data is considered one of the key metrics for the single currency, as it shapes expectations regarding European Central Bank rates. Still, with the final figures, the market reacts primarily to deviations from preliminary numbers. This is why the weight of these releases today largely depends on whether they provide a surprise. If the data matches the initial estimates, serious shifts in the market are unlikely. Without unexpected outcomes in the reports, the euro initiative will remain tied to external factors, and the EUR/USD pair will continue to focus on dollar dynamics and overall risk appetite.

Regarding the intraday strategy, I will rely more on implementing scenarios #1 and #2.

Buying Scenarios

Scenario #1: Today, I can buy euros when the price reaches around 1.1544 (green line on the chart), with the goal of it rising to 1.1571. At 1.1571, I plan to exit the market and sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. I can only count on the euro's growth after good reports. Important! Before buying, make sure the MACD indicator is above the zero mark and has just begun rising from there.

Scenario #2: I also plan to buy euros today in case of two consecutive tests of 1.1529 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal of the market upwards. One can expect growth towards the opposite levels of 1.1544 and 1.1571.

Selling Scenarios

Scenario #1: I plan to sell euros once the level of 1.1529 is reached (the red line on the chart). The target will be 1.1507, 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 will return today in the case of poor data. Important! Before selling, make sure the MACD indicator is below the zero mark and has just begun its decline from there.

Scenario #2: I also plan to sell euros today in the event of two consecutive tests of 1.1544, with the MACD indicator in the overbought area. This will limit the pair's upside potential and lead to a downward market reversal. One can expect a decline towards the opposite levels of 1.1529 and 1.1507.

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.