Trade Analysis and Recommendations for the Euro

The test of the 1.0427 level coincided with the MACD indicator beginning to move downward from the zero mark, confirming a valid sell signal in line with the prevailing downtrend. As a result, the pair dropped by 27 points, though it did not reach the 1.0400 target level.

Weak German and eurozone economic data were the primary drivers behind the euro's decline in the first half of the day. Now, investors and analysts will shift their focus to Fed Chair Jerome Powell's key statements, looking for clues about future U.S. monetary policy.

With each Fed announcement, the central bank provides more insight into how long the current rate stance will be maintained and whether adjustments might be made in response to economic shifts. Additionally, risks affecting Fed policy decisions—such as imported inflation from Trump's trade tariffs and global economic instability—are closely monitored.

When Powell addresses journalists, he may also provide clarifications on the labor market. While the U.S. economy remains relatively strong, his remarks could shed light on how employment conditions might influence future monetary policy decisions.

A dovish tone and indications of potential rate cuts would weaken the dollar and push the euro higher. Conversely, a hawkish stance would trigger strong demand for the U.S. dollar, leading to further euro depreciation.

For today's intraday trading, I will primarily focus on Scenario #1 and Scenario #2.

Buy Signal

Scenario #1: Buying the euro is possible if the price reaches 1.0433 (green line on the chart), with a target at 1.0491. At 1.0491, I plan to exit the trade and initiate a sell position, expecting a 30-35 point pullback from the entry point. A euro rally today is only feasible if the Fed signals rate cuts in the U.S.

Important! Before entering a buy trade, ensure that the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: Buying the euro is also an option if the price tests 1.0388 twice in a row, with the MACD indicator in the oversold zone. This would limit downward potential and lead to a market reversal upward. Potential targets: 1.0433 and 1.0491.

Sell Signal

Scenario #1: Selling the euro is planned when the price reaches 1.0388 (red line on the chart), with a target at 1.0344. At 1.0344, I will exit the trade and immediately enter a buy position, aiming for a 20-25 point rebound. Selling pressure could return at any moment, especially if the Fed adopts a hawkish stance.

Important! Before entering a sell trade, ensure that the MACD indicator is below the zero mark and just beginning to decline.

Scenario #2: Selling the euro is also an option if the price tests 1.0433 twice in a row, with the MACD indicator in the overbought zone. This would limit upward potential and lead to a market reversal downward. Expected targets: 1.0388 and 1.0344.

Chart Explanation

• Thin green line – Suggested buy entry level
• Thick green line – Expected Take Profit level, where price growth is unlikely to continue
• Thin red line – Suggested sell entry level
• Thick red line – Expected Take Profit level, where further price decline is unlikely
• MACD Indicator – Use overbought and oversold zones for trade confirmation

Important Notes for Beginner Forex Traders

• Be cautious when entering trades. It is best to stay out of the market before major fundamental data releases to avoid excessive volatility.
• If trading during news events, always set stop-loss orders to minimize losses.
• Without stop-loss protection, your entire deposit could be at risk—especially if you trade with high leverage and large volumes.
• Successful trading requires a clear trading plan, like the one outlined above.
• Avoid making impulsive trades based on short-term market movements—this is a losing strategy for intraday traders.