Analysis of Trades and Tips for Trading the European Currency

The price test at 1.1670 coincided with the moment when the MACD indicator was starting to move up from the zero mark, confirming the correct entry point to buy the euro. As a result, the pair rose by 10 pips.

Weak housing market data set the tone for trading and weighed on the dollar in the second half of the day. New home sales in July fell to 607,000 from 678,000 the previous month, while the inventory of unsold new homes increased to a level that corresponds to 9.6 months of supply at the current sales pace, compared to a norm of about six. Such a noticeable increase indicated a cooling of the real estate sector, which is particularly sensitive to high rates, and weakened expectations for a hawkish Federal Reserve. The Conference Board consumer confidence index reinforced the negative signal, declining for the second consecutive month. At the same time, the current situation estimate surged, while expectations collapsed to 68.2, remaining well below the 80 mark, which traditionally warns of an impending recession. In other words, Americans view the present positively, but are increasingly pessimistic about the future.

The euro benefited from the dollar's weakness, and the EUR/USD pair began to rise. The weak housing market and deteriorating consumer expectations argue against further Fed policy tightening, which has reduced the attractiveness of the American currency. Today, the euro enters the first half of the day with an empty economic calendar, leaving it dependent on external factors. The absence of data from the Eurozone means traders will not have internal reasons to reconsider their positions, and the main factors for the pair will remain sentiment around the dollar and market risk appetite.

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

Buying Scenarios

Scenario No. 1: Today, I can buy the euro when the price reaches around 1.1677 (the green line on the chart), with the aim of it rising to 1.1695. At point 1.1695, I plan to exit the market and sell the euro in the opposite direction, anticipating a movement of 30-35 pips from the entry point. One can expect the euro to rise in continuation of the trend. Important! Before buying, ensure that the MACD indicator is above the zero mark and is just beginning its upward movement from there.

Scenario No. 2: I also plan to buy the euro today in the event of two consecutive tests of 1.1656, with the MACD indicator in the oversold area. This will limit the downside potential of the pair and lead to an upward market reversal. I anticipate a rise to the opposite levels of 1.1677 and 1.1695.

Selling Scenarios

Scenario No. 1: I plan to sell the euro after the level of 1.1656 is reached (the red line on the chart). The target will be 1.1634, where I plan to exit the market and buy immediately in the opposite direction (anticipating a move of 20-25 pips in the opposite direction from the level). Pressure on the pair today will return with weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and is just beginning its downward movement from there.

Scenario No. 2: I also plan to sell the euro today in the event of two consecutive tests of 1.1677, with the MACD indicator in the overbought area. This will limit the upside potential of the pair and lead to a downward market reversal. I anticipate a decline to the opposite levels of 1.1656 and 1.1634.

What the Chart Shows:

• Thin green line – entry price for buying the trading instrument;
• Thick green line – estimated price where take profit can be set, or profit can be realized, as further growth above this level is unlikely;
• Thin red line – entry price for selling the trading instrument;
• Thick red line – estimated price where take profit can be set, or profit can be realized, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is important to be guided by overbought and oversold zones.

Important: Beginner forex traders need to make entry decisions very cautiously. Before key fundamental reports are released, it is best to stay out of the market to avoid sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without placing stop orders, you can quickly lose your entire deposit, especially if you do not practice money management and trade large volumes.

And remember, successful trading requires a clear trading plan, as outlined above. Making spontaneous trading decisions based on the current market situation is inherently a losing strategy for intraday traders.