Trade Breakdown and Trading Tips for the European Currency

The price test of 1.1715 occurred at a moment when the MACD indicator was just beginning to move down from the zero line, which confirmed a correct entry point for selling the euro. As a result, the pair declined by 10 points.

German data had no impact on the pair's direction. Given that producer prices remained unchanged and the GfK report brought no surprises, this had no noticeable effect on the EUR/USD rate in the first half of the day. It is clear that a cautious sentiment currently prevails in the market.

Next, we are awaiting figures on existing home sales. This indicator serves as a kind of barometer of the economy's health. High sales volumes signal confidence among the population about the future, stable incomes, and favorable lending conditions. Low sales volumes, on the contrary, point to uncertainty, fear of economic shocks, and possibly rising mortgage rates. Considering that the Fed is cutting interest rates, this should lead to a revival in the existing home market.

After analyzing the housing market data, attention will shift to the University of Michigan Consumer Sentiment Index. This index is not just a dry number, but a reflection of the collective mood—an indicator of consumer optimism or pessimism. It is formed based on household surveys assessing the current state of personal finances, employment prospects, and overall economic expectations. A high index indicates a willingness to spend, which in turn stimulates economic growth. A low index, on the other hand, foreshadows weaker consumer activity and a possible slowdown. Finally, the day will conclude with data on inflation expectations.

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

Buy Signal

Scenario No. 1: Today, buying the euro is possible when the price reaches the level around 1.1726 (green line on the chart), with a target of growth toward 1.1749. At 1.1749, 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. Strong euro growth should only be expected after good U.S. data. Important: Before buying, make sure 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 in the case of two consecutive tests of the 1.1705 level while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth can be expected toward the opposite levels of 1.1726 and 1.1749.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1705 level (red line on the chart). The target will be 1.1683, where I intend to exit the market and immediately buy in the opposite direction (targeting a 20–25 point move in the opposite direction from that level). Pressure on the pair may return today in the case of strong data. Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to move down from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1726 level while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1705 and 1.1683 can be expected.

What's on the Chart:

• Thin green line – entry price at which the instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be manually locked in, as further growth above this level is unlikely;
• Thin red line – entry price at which the instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to pay attention to overbought and oversold zones.

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

And remember: 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.