Trade Analysis and Guidance for the Euro

The price test at 1.1355 occurred when the MACD indicator had already risen significantly above the zero line, which, in my view, limited the pair's upward potential. For that reason, I did not buy the euro.

The euro failed to show meaningful growth due to a lack of economic data and continued trading in a narrow range, as market participants focused on the potential for a trade agreement between the U.S. and the European Union. Investors were waiting for news indicating progress in the negotiations, but so far, nothing has emerged. The lack of clarity regarding future trade relations supports the euro and puts pressure on the U.S. dollar. However, traders are also concerned that delays in reaching an agreement could negatively affect the European economy, which is already facing difficulties.

In the second half of the day, only the University of Michigan Consumer Sentiment Index and inflation expectations are due. Investors are likely to watch these indicators closely, as they may offer insight into the future trajectory of the economy and the potential response from the Federal Reserve.

The University of Michigan's Consumer Sentiment Index is a key gauge of consumer confidence in the economy. Higher readings typically suggest that consumers feel more optimistic about their financial prospects and are more likely to spend—an outcome that can stimulate economic growth. Conversely, lower readings may signal concerns about the economy and possible reductions in consumer spending.

I will rely primarily on the execution of Scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy the euro today if the price reaches 1.1372 (green line on the chart), targeting a rise to 1.1412. At 1.1412, I plan to exit the market and open a sell trade in the opposite direction, expecting a 30–35 point pullback. Euro growth will only be realistic after weak U.S. data. Important! Before buying, make sure the MACD indicator is above the zero mark and just beginning to rise from it.

Scenario #2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1340 price level, when the MACD is in the oversold zone. This will limit the pair's downward potential and lead to a reversal to the upside. A rise to 1.1372 and 1.1412 can then be expected.

Sell Signal

Scenario #1: I plan to sell the euro after the price reaches 1.1340 (red line on the chart), targeting a move down to 1.1292. At that level, I plan to exit the market and open long positions in the opposite direction (aiming for a 20–25 point rebound). Downward pressure will return if strong U.S. data is released. Important! Before selling, make sure the MACD indicator is below the zero mark and just starting to fall from it.

Scenario #2: I also plan to sell the euro today if there are two consecutive tests of 1.1372 while MACD is in overbought territory. This will limit the pair's upside and may lead to a downward reversal. A drop toward 1.1340 and then to 1.1292 can be expected.

Chart Details:

• Thin green line – entry price for long trades;
• Thick green line – projected Take Profit level, above which further growth is unlikely;
• Thin red line – entry price for short trades;
• Thick red line – projected Take Profit level, below which further decline is unlikely;
• MACD indicator – use overbought/oversold zones for entry decisions.

Important Note:

Beginner Forex traders should make market entry decisions with extreme caution. It's best to stay out of the market ahead of key fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always set stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit—especially if you don't use money management and trade with large volumes.

And remember, successful trading requires a well-defined trading plan like the one outlined above. Spontaneous decision-making based on current market moves is a losing strategy for intraday traders.