Trade Analysis and Trading Advice for the Euro

The first test of 1.0420 in the morning session occurred when the MACD indicator had already moved significantly below the zero mark, limiting the pair's downward potential. Because of this, I did not sell the euro. The second test of 1.0420 happened shortly after when the MACD was in the oversold zone, confirming a correct buy entry, which resulted in only a 10-point rise.

Traders closely monitor Eurozone inflation data, as it provides insights into the current economic state. Inflation growth figures in Germany matched economists' forecasts, leading to no significant market movement. However, the upcoming U.S. Producer Price Index (PPI) data for January could introduce volatility.

If the PPI shows high inflation, the Federal Reserve may maintain its hawkish stance, strengthening the U.S. dollar and pressuring the euro, similar to what happened yesterday.

The weekly report on initial jobless claims is also crucial. A rise in claims may indicate slowing economic growth and a weaker labor market, which could push the Fed toward a more dovish stance, weakening the dollar and supporting the euro.

For today's intraday strategy, I will primarily focus on executing Scenarios #1 and #2.

Buy Signal

Scenario #1: Buying the euro is possible when the price reaches 1.0431 (green line on the chart) with a target of 1.0467. At 1.0467, I plan to exit the market and sell the euro in the opposite direction, expecting a 30-35 point pullback.

A euro rally today is likely if U.S. inflation data is weaker than expected.

Important: Before buying, ensure the MACD indicator is above the zero mark and just starting to rise.

Scenario #2: I also plan to buy the euro if there are two consecutive tests of 1.0404, while the MACD is in the oversold zone. This will limit the pair's downward potential and may trigger a market reversal. Targets: 1.0431, 1.0467

Sell Signal

Scenario #1: Selling the euro is possible after the price reaches 1.0404 (red line on the chart), with a target of 1.0370. At 1.0370, I will exit the market and buy in the opposite direction, aiming for a 20-25 point retracement.

Important: Before selling, ensure the MACD indicator is below the zero mark and just starting to decline.

Scenario #2: I also plan to sell the euro if there are two consecutive tests of 1.0431, while the MACD is in the overbought zone. This setup will limit the pair's upward potential and may lead to a market reversal downward. Targets: 1.0404, 1.0370

Key Chart Levels:

• Thin Green Line – Entry price for buy trades
• Thick Green Line – Expected Take Profit level for long trades
• Thin Red Line – Entry price for sell trades
• Thick Red Line – Expected Take Profit level for short trades
• MACD Indicator: When entering the market, traders should monitor overbought and oversold zones.

Important Notes for Beginner Traders:

Exercise Caution – Avoid opening new trades before major economic reports to prevent sudden price fluctuations.

Use Stop-Loss Orders – If you trade during high-impact news releases, always set stop-loss orders to minimize potential losses. Without stop-losses, you risk rapid account depletion, especially if money management is not followed or if large lot sizes are used.

Follow a Structured Trading Plan – Spontaneous trading decisions based on current market conditions are a losing strategy for intraday traders. A clear trading plan, like the one outlined above, is essential for consistent success.