Trade breakdown and trading advice for the European currency

The test of the 1.1913 price level occurred when the MACD indicator had already moved a long way down from the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

In the first half of the day, the euro showed restrained stability. Favorable GDP data from Germany and Italy, as well as decent unemployment figures, limited the pair's downward potential. The released data pointed to some improvement in the economic situation in these leading eurozone countries, which keeps the chances of upward potential for EUR/USD intact.

Next, US Producer Price Index (PPI) data are expected, including the PPI excluding food and energy prices, as well as the Chicago PMI index. In addition, FOMC member Alberto Musalem is scheduled to speak. The release of US PPI data will be the key event of the day. Investors will closely monitor the overall inflation picture reflected in the PPI, as well as the narrower PPI excluding volatile food and energy prices. Higher-than-expected readings could trigger US dollar strengthening, as they would point to a possible increase in inflationary pressure. The Chicago PMI also deserves close attention, as it is a leading indicator of regional economic activity. A reading above 50 points indicates growth in business activity, while a reading below 50 points signals contraction.

The speech by FOMC member Alberto Musalem may also influence the markets. His comments on the current economic situation, inflation prospects, and future monetary policy will be closely analyzed by investors for clues about the Fed's next steps.

As for the intraday strategy, I will mainly rely on the implementation of scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible if the price reaches the 1.1944 level (green line on the chart), with a target of growth toward 1.1988. At 1.1988, I plan to exit the market and also sell the euro in the opposite direction, targeting a 30–35 point move from the entry point. Strong euro growth can be expected only in the case of weak economic data.Important: Before buying, make sure that the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1895 price level while the MACD indicator is in the oversold area. This would limit the pair's downward potential and lead to a reversal upward. A move toward the opposite levels of 1.1944 and 1.1988 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1895 level (red line on the chart). The target will be 1.1834, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 point move in the opposite direction from the level). Pressure on the pair will return in the case of strong economic data.Important: Before selling, make sure that the MACD indicator is below the zero line and is just starting to decline from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1944 price level while the MACD indicator is in the overbought area. This would limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1895 and 1.1834 can be expected.

What's on the chart:

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

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

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.