Trade review and trading tips for the euro

The price test at 1.1535 occurred as the MACD indicator began moving down from the zero line, confirming a valid entry point to sell the euro. However, the pair did not follow through into a new major decline.

Without significant macro releases, traders in EUR/USD focused on two factors: rising Federal Reserve-hike expectations and Christine Lagarde's speech, which unexpectedly compared the current AI boom to the crash of 1873. The European Central Bank chief reminded markets that euro-area households now hold roughly €400 billion in US tech stocks and warned of a growing gap with the US in computing capacity for AI. Lagarde also warned that Europe will pay for others' tech booms through higher yields regardless of whether it captures any of that growth.

The pair did not react to the speech, but by the end of the day the euro recovered a bit after the earlier large sell-off versus the dollar. In my view, the Fed-rate backdrop remains a more important driver for EUR/USD than one-off ECB remarks, and the evening recovery should be seen more as a technical correction than a shift in sentiment.

Today's busy macro calendar in the morning gives the euro a real chance to continue the correction. Publication of consumer-price indices for France and Spain will set an early tone for euro-area inflation ahead of more significant pan-European data, and any deviation from forecasts could adjust market expectations for the ECB's future rate path. Given that the central bank already raised rates last week and flagged itself as the most hawkish G7 central bank, surprises in either direction from these two countries risk moving the pair sharply.

Also important are ZEW indices for Germany and the euro area: the expectations gauge reflects investors' sentiment for the coming months, while the current-conditions reading shows how the German economy is coping today. Given the recent notable improvement in the Ifo survey, I expect ZEW to confirm a gradual business-climate recovery in the euro area's largest economy, and any improvement there traditionally supports the single currency. The euro-area external-trade balance will complement the picture by showing how robust export contributions are amid ongoing geopolitical pressure on energy markets.

In my view, with generally neutral or slightly stronger readings, EUR/USD has room to retrace recent losses, while weak ZEW prints or an inflation spike in Spain or France could restore downward momentum before midday.

For intraday strategy, I will rely mainly on scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: buy the euro today if the price reaches around 1.1541 (green line on the chart), targeting a rise to 1.1568. At 1.1568, I plan to exit the market and also sell the euro in the opposite direction, aiming for a 30–35 pip move from the entry. Expect euro gains only as part of a correction. Important: before buying, ensure the MACD indicator is above the zero line and only beginning to rise from it.

Scenario No. 2: I also plan to buy the euro today in case of two consecutive tests of 1.1526 while the MACD is in oversold territory. This will limit the pair's downside potential and lead to an upward reversal. One can expect moves to the opposite levels 1.1541 and 1.1568.

Sell scenarios

Scenario No. 1: I plan to sell the euro after it reaches 1.1526 (red line on the chart). The target will be 1.1496, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip reversal from that level). Pressure on the pair will return today if data are weak. Important: before selling, ensure the MACD indicator is below the zero line and only beginning to fall from it.

Scenario No. 2: I also plan to sell the euro today if it tests 1.1541 twice while the MACD is in overbought territory. This will limit the pair's upside potential and trigger a reversal down. Expect a decline to the opposite levels of 1.1526 and 1.1496.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.