Analysis of Trades and Tips for Trading the Euro

A test of the 1.0504 level coincided with the MACD indicator moving significantly upward from the zero mark, limiting the pair's upward potential, particularly following yesterday's euro sell-off. For this reason, I refrained from buying. A second test of 1.0504, when MACD appeared to be in the overbought territory, triggered Scenario 2 for selling but ultimately resulted in losses as the anticipated decline did not occur.

This afternoon, we expect data on job openings and labor turnover, secondary indicators of the labor market's health. High job vacancies may indicate a shortage of skilled workers, opening opportunities for job seekers and career growth. However, high turnover may reflect unstable working conditions, often prompting employers to reassess their employee retention strategies.

The RCM/TIPP economic optimism index, also due for release, may adjust the broader picture. This index reflects consumer and business sentiment and their expectations for the economic future. An increase in optimism could signal potential economic recovery, which may, in turn, impact investment and job creation.

These indicators are strongly interdependent and mutually reinforcing. Rising optimism can boost job openings, while high vacancy rates can uplift overall economic sentiment. Strong data may help the US dollar recover losses incurred during the morning session against the euro and other risk assets.

Regarding intraday strategy, I will focus on implementing Scenarios 1 and 2.

Buy Signal

Scenario 1: Buy the euro at around 1.0529 (green line on the chart) with a target of 1.0555. I plan to exit at 1.0555 and consider selling the euro in the opposite direction, aiming for a 30–35 point movement from the entry point. A strong euro rise today depends on weak US labor market data.Before buying, ensure the MACD indicator is above the zero mark and beginning its ascent.

Scenario 2: I plan to buy the euro if the 1.0511 level is tested twice consecutively and the MACD shows oversold conditions. This will limit the pair's downward potential and trigger a reversal to the upward. The target levels are 1.0529 and 1.0555.

Sell Signal

Scenario 1: Sell the euro after reaching the 1.0511 level (red line on the chart). The target will be 1.0488, where I plan to exit and potentially buy the euro in the opposite direction for a 20–25 point upward correction. Selling pressure will persist if US data is strong.Before selling, ensure the MACD indicator is below the zero mark and beginning its descent.

Scenario 2: I also plan to sell the euro after two consecutive tests of 1.0529, provided the MACD is in the overbought territory. This will limit the pair's upward potential and lead to a reversal to the downward. The target levels are 1.0511 and 1.0488.

Chart Explanation

• Thin Green Line: Entry price for buying the instrument.
• Thick Green Line: Expected price for Take Profit or manual profit booking, as further growth beyond this level is unlikely.
• Thin Red Line: Entry price for selling the instrument.
• Thick Red Line: Expected price for Take Profit or manual profit booking, as further decline below this level is unlikely.
• MACD Indicator: Entry into the market should be guided by overbought and oversold zones.

Important Reminder for New Traders

• Carefully evaluate market entry decisions, especially before key reports.
• Refrain from trading during news releases to mitigate the risk of sharp price fluctuations.
• Always set stop-loss orders to minimize losses. Failure to do so can lead to rapid depletion of your deposit, especially if trading large volumes without sound money management.
• A solid trading plan is crucial for success. Avoid impulsive decisions based on current market conditions, as this is inherently a losing strategy for intraday traders.