Trade analysis and advice on trading the European currency

The test of the 1.1541 level occurred when the MACD indicator had already moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the euro and stayed out of the market.

In the second half of today's session, investors' attention will mainly focus on the release of the University of Michigan's Consumer Sentiment Index and inflation expectations data. The speech by FOMC member Philip N. Jefferson is unlikely to bring any changes.

The University of Michigan's Consumer Sentiment Index is an important barometer of the health of the U.S. economy. It shows how confident consumers are in the current and future economic outlook, directly influencing their spending levels. An increase in the index usually indicates optimism and potential growth in consumer spending, which supports the U.S. dollar and leads to a decline in the EUR/USD pair. The inflation expectations included in the Michigan report also play a role in the Federal Reserve's monetary policy. If the public expects higher inflation, people may demand wage increases, which, in turn, can drive prices even higher.

As I mentioned earlier, Jefferson's speech will likely be routine and not cause any major changes in current market trends. Although his comments are always of interest to analysts, they are expected to align with the Fed's current "wait-and-see" strategy.

Regarding intraday trading, I'll rely mainly on Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, buying the euro is possible when the price reaches around 1.1551 (green line on the chart), with a target at 1.1579. At 1.1579, I plan to exit the market and open a short position, expecting a 30–35 point move in the opposite direction. A euro rise today is only likely if the Fed officials maintain a dovish stance.Important! Before buying, make sure the MACD indicator is above the zero line and just starting to rise from it.

Scenario #2: I also plan to buy the euro if the 1.1527 level is tested twice in a row while the MACD is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. A rise toward 1.1551 and 1.1579 can then be expected.

Sell Signal

Scenario #1: I plan to sell the euro after it reaches 1.1527 (red line on the chart). The target will be 1.1497, where I plan to exit and open a long position in the opposite direction (expecting a 20–25 point rebound from that level). Selling pressure on the pair will return only if U.S. statistics are strong.Important! Before selling, make sure the MACD indicator is below the zero line and just starting to decline from it.

Scenario #2: I also plan to sell the euro if the 1.1551 level is tested twice in a row while the MACD is in the overbought zone. This will limit the pair's upward potential and lead to a downward reversal. A decline toward 1.1527 and 1.1497 can then be expected.

Chart Explanation

• Thin green line – entry price for buying the trading instrument
• Thick green line – the suggested Take Profit level or area to manually lock in profit; further growth above this level is unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – the suggested Take Profit level or area to manually lock in profit; further decline below this level is unlikely
• MACD indicator – when entering the market, it is crucial to consider overbought and oversold zones

Important Note

Beginner Forex traders must be extremely cautious when deciding when to enter the market. Before major fundamental reports are released, it's best to stay out of the market to avoid sharp price fluctuations. 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 proper money management and trade with large volumes.

And remember: successful trading requires a clear trading plan, like the one outlined above. Making spontaneous trading decisions based on current market movements is an inherently losing strategy for intraday traders.