Analysis of Trades and Trading Tips for the Euro

The price level of 1.0387 was tested when the MACD indicator had been in the oversold zone for a considerable period and was starting to recover. This situation presented a suitable entry point for buying the euro. Consequently, the correction resulted in an increase of about 20 pips. I decided against buying at 1.0405, as the MACD indicator had already moved significantly above the zero line by the time the level was reached, which I believed limited the pair's upward potential.

Recent weak data from the U.S. Consumer Confidence Index led to significant fluctuations in the euro-dollar currency pair. Traders, uncertain about the sustainability of the U.S. economic recovery, began adjusting their positions as the holiday season approached. This created a horizontal channel in the market, making trading patterns more predictable but also limiting profit opportunities. The situation is further complicated by the fact that changes in consumer confidence can indicate potential issues in the U.S. labor market and consumer spending; however, this indicator should be analyzed alongside other relevant data.

Technical analysis emphasizes the importance of exercising caution while trading in the current environment, characterized by instability and thin market conditions, which are common during the pre-holiday period. With no significant fundamental data being released from the eurozone today, it is crucial to be careful when deciding on market entries.

For my intraday strategy, I intend to focus primarily on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Today, I plan to buy the euro upon reaching the 1.0405 level (green line on the chart) with a target of rising to 1.0440. At the 1.0440 level, I plan to exit the market and sell the euro on a reversal, aiming for a movement of 30-35 pips from the entry point. A strong upward move in the euro during the first half of the day is unlikely. Important! Before buying, ensure that the MACD indicator is above the zero mark and beginning to rise.

Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.0389 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upwards. Growth to the opposite levels of 1.0405 and 1.0440 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after reaching the 1.0389 level (red line on the chart). The target will be the 1.0361 level, where I plan to exit the market and immediately buy on a reversal (expecting a movement of 20-25 pips in the opposite direction from this level). Pressure on the pair can return at any moment. Important! Before selling, ensure that the MACD indicator is below the zero mark and beginning to decline.

Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.0405 level 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 decline to the opposite levels of 1.0389 and 1.0361 can be expected.

Chart Notes

• Thin green line: Entry price for buying the trading instrument.
• Thick green line: A suggested target for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin red line: Entry price for selling the trading instrument.
• Thick red line: A suggested target for Take Profit or manually locking in profits, as further decline below this level is unlikely.
• MACD Indicator: Critical for identifying overbought and oversold zones to guide market entry decisions.

Important Note for Beginner Traders

• Always approach market entry decisions cautiously.
• Avoid trading during major news releases to sidestep volatile price swings.
• If trading during news releases, always set stop-loss orders to minimize losses.
• Trading without stop-loss orders or money management practices can quickly deplete your deposit, especially when using large volumes.
• A clear trading plan, like the one outlined above, is essential for successful trading. Spontaneous trading decisions based on current market conditions are inherently disadvantageous for intraday traders.