Trade Review and Tips for Trading the Euro

The test of the 1.1410 price level occurred when the MACD indicator had already moved significantly above the zero line, limiting the pair's upward potential. For this reason, I did not buy the euro. The second test of 1.1410 triggered Scenario No. 2 for selling the euro, resulting in a modest decline in the pair.

As today's data showed, eurozone M3 money supply accelerated noticeably in May, providing another argument for the ECB's hawkish camp. According to the report, the annual growth rate of the broad M3 aggregate increased to 3.2%, up from 2.7% in April.

The expansion in eurozone M3 indicates improving financial conditions and stronger business activity. This, in turn, could boost consumer spending and investment, supporting economic growth. The recovery in lending, reflected in higher loan volumes for both households and businesses, is another sign that the economy is gaining momentum. Against this favorable backdrop, the European Central Bank is likely to continue tightening monetary policy. A rate hike in July would be a logical step in combating inflation, which remains above the target level.

There are no U.S. economic releases scheduled for the second half of the day, which will likely reduce demand for the dollar. Under such conditions, market activity may remain subdued. Nevertheless, speeches by Federal Reserve officials and other major central bank representatives could still influence the EUR/USD pair intraday.

For my intraday strategy, I will primarily rely on the execution of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Buy the euro when the price reaches 1.1410 (green line on the chart), targeting a rise to 1.1435. I plan to exit long positions at 1.1435 and consider opening short positions there, targeting a 30–35 point move from the entry point. Today's upside is expected to be part of a corrective move.

Important: Before buying, make sure the MACD indicator is above the zero line and is just beginning to move higher.

Scenario No. 2: I will also consider buying if the price tests 1.1393 twice consecutively while the MACD indicator is in oversold territory. This would limit the pair's downward potential and could trigger a bullish reversal. In that case, a move toward 1.1410 and 1.1435 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after it reaches 1.1393 (red line on the chart). The downward target is 1.1358, where I intend to close short positions and immediately consider buying, targeting a 20–25 point rebound. Selling pressure is unlikely to return strongly today.

Important: Before selling, make sure the MACD indicator is below the zero line and is just beginning to move lower.

Scenario No. 2: I will also consider selling if the price tests 1.1410 twice consecutively while the MACD indicator is in overbought territory. This would limit the pair's upward potential and could trigger a bearish reversal. In that case, a decline toward 1.1393 and 1.1358 can be expected.

Chart Guide

• Thin green line – entry price for buying the instrument.
• Thick green line – suggested Take Profit level or an area to manually lock in profits, as further gains above this level are considered unlikely.
• Thin red line – entry price for selling the instrument.
• Thick red line – suggested Take Profit level or an area to manually lock in profits, as further declines below this level are considered unlikely.
• MACD indicator – when entering the market, pay close attention to overbought and oversold conditions.

Important

Beginner Forex traders should exercise extreme caution when making market entry decisions. It is generally best to stay out of the market ahead of major fundamental reports to avoid sharp price swings. If you choose to trade during news releases, always use stop-loss orders to minimize potential losses. Trading without stop losses can quickly wipe out your trading account, especially if you use large position sizes without proper money management.

Remember that successful trading requires a well-defined trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on current market conditions is generally a losing strategy for intraday traders.