Analysis and Trading Tips for the Euro

The test of the 1.0355 price level occurred when the MACD indicator had already dropped significantly below the zero line, which clearly limited the pair's downward potential. For this reason, I did not sell the euro. A second test of 1.0355 after a short interval, while the MACD was in the oversold zone, allowed Scenario #2 for buying to play out. However, as you can see on the chart, this did not lead to any significant movement, as demand for the euro failed to return.

Amid uncertainty surrounding the future actions of the U.S. administration, European economies are facing new challenges. Investors remain cautious about risks stemming from Trump's policies, increasing the likelihood of dollar strengthening. This creates additional pressure on the euro, which is already struggling with internal issues within the European Union. Today's ZEW report confirms this sentiment: the second consecutive year of recession has dampened economic expectations in Germany, while political uncertainty caused by coalition-building in Germany has also increased.

During the U.S. session, investors' attention will again focus on statements and decisions from Donald Trump, as no other major economic statistics are expected. It's advisable to monitor every word from the new administration and act accordingly.

Trading Strategy for the Day: Focus on Scenarios #1 and #2

Buy Signal

Scenario #1: Today, I plan to buy the euro when the price reaches the 1.0372 level (green line on the chart) with a target of 1.0417. At 1.0417, I plan to exit the market and sell the euro, expecting a 30-35 point pullback from the entry point. A rally in the euro today is only possible after new comments from Donald Trump.Important! Before buying, ensure that 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 there are two consecutive tests of the 1.0342 level while the MACD indicator is in the oversold zone. This will limit the pair's downward potential and lead to a market reversal upward. Growth to the opposite levels of 1.0372 and 1.0417 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after it reaches 1.0342 (red line on the chart), targeting 1.0308, where I'll exit the market and buy back immediately, anticipating a 20-25 point rebound. Selling pressure could return at any moment.Important! Before selling, ensure that 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 there are two consecutive tests of the 1.0372 level while the MACD indicator is in the overbought zone. This will limit the pair's upward potential and lead to a market reversal downward. Declines to the opposite levels of 1.0342 and 1.0308 can be expected.

Chart Explanation:

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Presumed price level for Take Profit or manually locking in profits, as further growth above this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Presumed price level for Take Profit or manually locking in profits, as further declines below this level are unlikely.
• MACD Indicator: Use overbought and oversold zones as guidance for market entry.

Important Note for Beginner Forex Traders:

Beginner traders should make trading decisions cautiously. Before the release of significant fundamental reports, it's best to stay out of the market to avoid getting caught in sharp price movements. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-losses, you can quickly lose your entire deposit, especially if you trade large volumes without proper money management.

Remember: Successful trading requires a clear trading plan, similar to the one outlined above. Spontaneous trading decisions based on current market situations are inherently a losing strategy for intraday traders.