Trade Analysis and Trading Tips for the European Currency

The test of the 1.1402 level occurred at a time when the MACD indicator had moved significantly above the zero line, which limited the pair's upward potential. For this reason, I did not buy the euro.

In the absence of domestic market drivers and fundamental data, the pair's direction is determined by the geopolitical backdrop, which remains concerning. Rising tensions around the Strait of Hormuz and the ongoing exchange of strikes between the United States and Iran are maintaining a high risk premium. This traditionally weighs on risk assets and limits currencies such as the euro.

In addition, ahead of the key U.S. inflation data, traders prefer to remain cautious. The June Consumer Price Index and its core reading excluding food and energy will be released shortly, followed by Kevin Warsh's semiannual testimony before Congress. Inflation data is critical because it determines the future path of the Federal Reserve's interest rate policy, while the core index is particularly important as it reflects underlying price pressures without the impact of volatile components. For the single currency, the implications are straightforward: figures above forecasts would strengthen the dollar and pressure EUR/USD, while weaker inflation would support the euro.

Warsh's speech also deserves special attention, as his assessment of the economy and hints regarding the regulator's future actions could significantly move the pair. A more hawkish stance from the Fed official would provide another reason to buy the dollar and sell the euro.

Regarding the intraday strategy, I will focus primarily on the implementation of Scenario #1 and Scenario #2.

Buy Signal

Scenario #1:

Today, I plan to buy the euro if the price reaches the 1.1409 level (green line on the chart), with a target of rising toward 1.1440. At 1.1440, I plan to exit the market and also sell the euro in the opposite direction, expecting a move of 30–35 points from the entry point. A rise in the euro can be expected today if the Fed adopts a dovish tone.

Important: Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2:

I also plan to buy the euro today if there are two consecutive tests of the 1.1395 level at a time when the MACD indicator is in the oversold zone. This would limit the pair's downward potential and lead to an upward market reversal. A rise toward the opposite levels of 1.1409 and 1.1440 can be expected.

Sell Signal

Scenario #1:

I plan to sell the euro after the price reaches the 1.1395 level (red line on the chart). The target will be 1.1365, where I plan to exit the market and immediately buy in the opposite direction, expecting a reversal move of 20–25 points from the level. Downward pressure on the pair will return if U.S. inflation rises sharply.

Important: Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2:

I also plan to sell the euro today if there are two consecutive tests of the 1.1409 level at a time when the MACD indicator is in the overbought zone. This would limit the pair's upward potential and lead to a downward market reversal. A decline toward the opposite levels of 1.1395 and 1.1365 can be expected.

What Is Shown on the Chart:

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

Important: Beginner Forex traders should be extremely cautious when making decisions about entering the market. Before the release of important fundamental reports, it is best to stay out of the market to avoid exposure to sharp exchange rate fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not use proper money management and trade with large volumes.

Remember that 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.