Trade Review and Tips for Trading the Euro

The test of the 1.1207 price level occurred just as the MACD indicator was beginning to move downward from the zero line, confirming a valid entry point for selling the euro. As a result, the pair declined by 15 points.

Unexpected developments in France set the tone for the euro from the start of the day. Preliminary October PMI data showed that the eurozone economy was slowing faster than expected, and the single currency immediately fell sharply. The Composite PMI declined to 51.9 from 53.1 in September, reaching a four-month low. Meanwhile, the services sector, which accounts for most of the region's economic activity, slowed to 51.7 from 53.0. The manufacturing index fell to 52.4. France recorded the weakest results. For the ECB, this combination means that sluggish growth and high inflation are occurring simultaneously, making any policy decisions more difficult.

Preliminary US PMI data for October will be released in the second half of the day. The forecasts provide a useful comparison with the European data released this morning. The manufacturing index is expected to come in at 55.5, down from 55.9, while the services index is forecast at 58.0, compared with 58.8 previously. The Composite PMI stood at 58.4 in the previous reading. Thus, the market picture suggests that the US economy is growing steadily, while the eurozone is losing momentum under pressure from high energy prices and weak economic performance in France. The University of Michigan's data will also be released today.

If the figures are stronger than expected, the dollar will continue to rise, leaving the euro with little chance of a rebound. Against this backdrop, EUR/USD is likely to remain under pressure through the end of the week.

As for the intraday trading strategy, greater emphasis will be placed on Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, the euro can be bought when the price reaches the 1.1205 level (the green line on the chart), with an upward target of 1.1228. At 1.1227, the plan is to close the position and then sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. A rise in the euro today may be expected if US data are weaker than anticipated. Important: Before buying, make sure that the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: The euro can also be bought today if the price tests 1.1192 twice consecutively while the MACD indicator is in the oversold zone. This would limit the pair's downward potential and trigger an upward market reversal. The upward targets are 1.1205 and 1.1228.

Sell Signal

Scenario No. 1: The plan is to sell the euro after the price reaches 1.1192 (the red line on the chart). The target is 1.1169, where the position will be closed and a buy position opened immediately in the opposite direction, targeting a rebound of 20–25 points from that level. Selling pressure on the pair could return at any time. Important: Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: The euro can also be sold today if the price tests 1.1205 twice consecutively while the MACD indicator is in the overbought zone. This would limit the pair's upward potential and trigger a downward market reversal. The downward targets are 1.1192 and 1.1169.

What the Chart Shows

• Thin green line — the entry price at which the trading instrument can be bought.
• Thick green line — the projected price level at which Take Profit can be set or profits can be closed manually, as further gains above this level are considered unlikely.
• Thin red line — the entry price at which the trading instrument can be sold.
• Thick red line — the projected price level at which Take Profit can be set or profits can be closed manually, as further declines below this level are considered unlikely.
• MACD indicator — when entering the market, it is important to consider overbought and oversold zones.

Important: Beginner Forex traders should exercise great caution when making entry decisions. Before the release of major fundamental reports, it is generally best to stay out of the market to avoid exposure to sharp exchange-rate fluctuations. If trading during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, the entire trading account can be depleted very quickly, especially when large position sizes are used without proper money management.

Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based on current market conditions is a fundamentally flawed strategy for an intraday trader.