Trade Analysis and Trading Advice for the European Currency

The test of the 1.1770 price level occurred at the moment when the MACD indicator was just beginning to move upward from the zero line, which confirmed a correct entry point for buying the euro. As a result, the pair rose by 20 points.

The scarcity of economic news from the European region ahead of the New Year holidays affected the instability of the EUR/USD exchange rate. However, after a noticeable decline in the currency pair, an influx of buyers was observed, allowing the euro to recover. From a fundamental perspective, the key focus for investors remains signals regarding the future direction of monetary policy from the European Central Bank and the U.S. Federal Reserve. Any hints of a strategy change by these financial regulators could trigger sharp fluctuations in the EUR/USD rate.

In the second half of the day, we are expecting a report on pending home sales in the U.S. housing market. This report is an indicator of the health of the construction sector. A high volume of pending sales may signal a slowdown in the market, potential price declines, and increased risks for developers. A low volume, on the contrary, indicates stable demand and buyer confidence. This indicator helps assess future housing supply and understand how balanced supply and demand are.

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

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches the level around 1.1790 (green line on the chart), with a growth target at 1.1817. At 1.1817, 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 level. A strong rise in the euro can be expected within the trend after weak U.S. data.

Important! Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in the case of two consecutive tests of the 1.1770 price level while the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to a reversal of the market upward. Growth toward the opposite levels of 1.1790 and 1.1817 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1770 level (red line on the chart). The target will be 1.1745, where I plan to exit the market and immediately buy in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Strong pressure on the pair is unlikely to return today.

Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the case of two consecutive tests of the 1.1790 price level while the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a reversal of the market downward. A decline toward the opposite levels of 1.1770 and 1.1745 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 manually locked in, 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 manually locked in, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to consider overbought and oversold zones.

Important:

Beginner Forex traders should make market entry decisions very cautiously. Before the release of major 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 lose your entire deposit very quickly, especially if you do not use money management and trade large volumes.

And remember, 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.