Trade Analysis and Tips for the European Currency

The price test at 1.1604 occurred when the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point to buy euros. As a result, the pair fell to the target level of 1.1621.

The empty economic calendar in the U.S. was the main reason why the dollar slightly retreated against the euro yesterday. After a swift strengthening fueled by hawkish signals from Jackson Hole, the American currency lacked new drivers, and the market took the opportunity for a slight correction. However, it would be premature to consider this a reversal, as pressure on the currency market remains following Warsh's speech. His emphasis on prioritizing the fight against inflation continues to support the dollar, thus limiting the euro's potential to benefit from the pause. While the EUR/USD pair rose slightly, the dollar's weakness did not weaken, constraining its potential. So long as the Federal Reserve remains hawkish, the initiative in the medium term belongs to the American currency.

Today, the euro will have its driver for movement. The day's culmination will be the August consumer price index for the Eurozone. Before this, data on retail sales in Germany and the region's manufacturing PMI will be released, and the July unemployment rate will round out the agenda. These indicators help assess the state of demand, industry, and the labor market. Still, inflation will be the key for the single currency, as it determines the trajectory of the European Central Bank's rate. The market is anticipating a sharp increase in inflation to 3.3%, and confirmation of this forecast could provoke a new wave of euro buying. High prices will bolster expectations of a tight regulatory stance and provide upward momentum for the EUR/USD pair, especially in light of recent hawkish signals from the ECB.

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

Buy Scenarios

Scenario #1: Today, I can buy euros upon reaching a price around 1.1615 (the green line on the chart), targeting a rise to the level of 1.1635. At 1.1635, I plan to exit the market and sell euros immediately in the opposite direction, anticipating a movement of 30-35 pips from the entry point. The euro's growth can only be expected after very strong data. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy euros today in the event of two consecutive tests of 1.1603 when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to an upward market reversal. Growth can be expected towards opposing levels of 1.1615 and 1.1635.

Sell Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1603 (the red line on the chart). The target will be 1.1581, where I intend to exit the market and buy immediately in the opposite direction (anticipating a move of 20-25 pips in the opposite direction from that level). Pressure on the pair will return today with weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell euros today in the event of two consecutive tests of 1.1615, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected towards opposing levels of 1.1603 and 1.1581.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.