Trade Review and Advice on Trading the Euro

The first test of the 1.1712 price occurred when the MACD indicator had already moved well below the zero mark, which limited the pair's downside potential. For this reason, I did not sell the euro. The second test of this price occurred when the MACD entered the oversold area, enabling the implementation of buy scenario #2 and resulting in a 20-pip rise for the pair.

Last Friday, the US dollar came under pressure due to an unexpected drop in the University of Michigan Consumer Sentiment Index. This indicator, which reflects the public's outlook on economic conditions, fell to a level of 55 (versus a forecasted rise to 58), sparking concerns about a possible reduction in future consumer spending. This weighed on the dollar's position. Despite the temporary weakness, the long-term outlook for this indicator remains positive, and the dollar's dynamics in the coming days will be determined by the Federal Reserve's interest rate decision.

Today, only the eurozone trade balance and the Bundesbank's monthly report are due on the macro calendar. Even weak data are unlikely to trigger a major euro sell-off. Later, ECB President Christine Lagarde's remarks will be in focus. If the trade balance figures show further deterioration, this may intensify concerns about the competitiveness of the European economy and its resilience to external shocks—especially following the US introduction of trade tariffs. Particular attention will be paid to energy import dynamics, which have been a significant drag on the eurozone's trade balance. The Bundesbank's monthly report, in turn, will provide a more detailed review of the German economy, the key growth engine for the whole region. Comments from the Bundesbank on inflation, interest rates, and economic prospects can influence short-term euro fluctuations, but are unlikely to bring about significant shifts in market sentiment.

The main event of the day will undoubtedly be Christine Lagarde's speech. Investors will carefully watch her comments for signals regarding the ECB's further policy strategy.

As for the intraday strategy, I will focus more on implementing scenarios #1 and #2.

Buy Scenario

Scenario #1: Today, I will consider buying the euro around the 1.1738 level (green line on the chart), targeting a rise to 1.1772. At 1.1772, I plan to exit longs and possibly sell the euro in the opposite direction for a move of 30-35 pips from the entry point. Euro upside should only be expected after strong data. Important! Before buying, ensure the MACD indicator is above the zero line and beginning to rise from it.

Scenario #2: I also plan to buy the euro today if there are two consecutive tests of the 1.1722 level while the MACD indicator is in the oversold area. This will limit the pair's downside potential and trigger a reversal upwards. Growth can be expected at the opposite levels of 1.1738 and 1.1772.

Sell Scenario

Scenario #1: I plan to sell the euro after it reaches the 1.1722 level (red line on the chart). The target will be 1.1691, at which I will exit shorts and consider buying immediately in the opposite direction (expecting a 20–25 pip rebound from the level). Downside pressure on the pair should return on weak data. Important! Before selling, ensure the MACD indicator is below the zero line and beginning to decline from it.

Scenario #2: I also plan to sell the euro today if there are two consecutive tests of the 1.1738 level while the MACD indicator is in the overbought area. This will limit the pair's upside potential and prompt a reversal downwards. Declines can be expected at the opposite levels of 1.1722 and 1.1691.

What's on the Chart:

Thin green line – entry price at which the instrument can be bought.

Thick green line – suggested price for taking profit or manually securing profits, as further growth above this level is unlikely.

Thin red line – entry price at which the instrument can be sold.

Thick red line – suggested price for taking profit or manually securing profits, as further decline below this level is unlikely.

MACD indicator: When entering the market, it is important to refer to overbought and oversold areas.

Important. Beginner forex traders should exercise extreme caution when making entry decisions. Before important fundamental reports, it is best to stay out of the market to avoid sharp price swings. If you decide to trade during the release of news, always use 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 large volumes. And remember: for successful trading, you need a clear trading plan, as I described above. Making spontaneous trading decisions based on the current market situation from moment to moment is a losing strategy for an intraday trader.