Trade review and tips for trading the euro

A price test at 1.1217 occurred as the MACD indicator began moving up from the zero mark, confirming a valid entry point to buy the euro. As a result, the pair rose toward the 1.1234 target area.

Yesterday the US housing market delivered an unpleasant surprise for the dollar. Housing starts fell 5.2%, and pending home sales — the index that tracks contracts signed but not yet closed — plunged 7.3%. On top of that, geopolitical headlines emerged: Channel 12 reported that a Pakistan-mediated plan had received US backing and Iranian consent, though a participant later denied a deal was imminent. In my view, the euro benefited more from a weaker dollar than from strong European data.

The pair enters the session without any domestic eurozone releases, so direction will depend on central-bank comments. This morning, Bundesbank president Joachim Nagel will speak, and the Bundesbank will publish its monthly report; the report typically assesses inflation and economic activity in Germany. In the evening, Christine Lagarde will also speak. My view is simple: only a distinctly hawkish tone will help the euro keep rising under current conditions. Nagel is among those advocating a cautious but decisive line — in mid-October he said the European Central Bank could take further steps if conditions do not change — while the market is pricing a pause at the next meeting and another hike to 2.75% in December. Any confirmation of that path in Nagel's remarks or the Bundesbank report would signal further tightening.

Lagarde has recently emphasized high energy prices, so the market will watch whether her emphasis shifts.

For intraday strategy, I will mainly rely on Scenarios 1 and 2.

Scenarios for Buying

Scenario No. 1: today it is possible to buy the euro upon reaching a price around 1.1230 (green line on the chart) with a target of rising to the level of 1.1253. At 1.1253, I plan to exit the market and sell the euro in the opposite direction, expecting a move of 30–35 pips from the entry point. One can count on the euro rising today only after strong data. Important! Before buying, make sure the MACD indicator is above the zero line and just beginning to rise.

Scenario No. 2: I also intend to buy the euro today in the event of two consecutive tests of the price 1.1217 at a time when the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. One can expect a rise to the opposite levels of 1.1230 and 1.1253.

Scenarios for Selling

Scenario No. 1: I plan to sell the euro after it reaches 1.1217 (red line on the chart). The target is 1.1192, where I intend to exit the market and immediately buy in the opposite direction (expecting a 20–25-pip move away from the level). Strong pressure on the pair can return at any moment today. Important! Before selling, make sure the MACD indicator is below the zero mark and is only beginning to decline from it.

Scenario No. 2: I also intend to sell the euro today in the event of two consecutive tests of the price 1.1230 at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. One can expect a decline to the opposite levels of 1.1217 and 1.1192.

What's on the chart:

Thin green line — entry price where you can buy the instrument.

Thick green line — approximate price where you can place Take Profit or manually lock in profits, because further upside above this level is unlikely.

Thin red line — entry price where you can sell the instrument.

Thick red line — approximate price where you can place Take Profit or manually lock in profits, because further downside below this level is unlikely.

MACD indicator. When entering the market, it's important to consider overbought and oversold zones.

Important. Novice Forex traders must be very cautious when deciding to enter the market. It is best to stay out before major fundamental reports to avoid getting caught in sharp price swings. 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 don't use money management and trade large volumes.

Remember: successful trading requires a clear trading plan, like the example above. Spontaneous trade decisions based solely on the immediate market situation are, by definition, a losing strategy for an intraday trader.