The test of the 1.1517 level occurred when the MACD indicator had already moved significantly above the zero line, limiting the pair's upward potential. A second test of 1.1517 allowed Sell Scenario #2 to play out, resulting in a decline toward 1.1499.
The euro is approaching month-end with its focus on upcoming U.S. economic data, namely the University of Michigan Consumer Sentiment Index and inflation expectations. Consumer sentiment serves as a barometer of households' willingness to spend, while inflation expectations shape the market's outlook for the Federal Reserve's future monetary policy. If both indicators come in stronger than expected, risk appetite could deteriorate and demand for the U.S. dollar could return, putting additional pressure on the single currency. Profit-taking is another factor weighing on the euro. After the strong rally seen over recent sessions, the EUR/USD pair has built up conditions for a pullback, as market participants often partially close profitable positions at the end of the month. Combined with a potential strengthening of the U.S. dollar, this could interrupt the euro's bullish momentum. Therefore, further price action will depend both on the incoming data and on the market's willingness to maintain its recent gains.
As for the intraday strategy, I will primarily rely on the implementation of Scenario #1 and Scenario #2.
Scenario #1: Today, I plan to buy the euro if the price reaches 1.1506 (the green line on the chart), with a target of 1.1531. At 1.1531, I plan to exit long positions and also open short positions, expecting a 30–35 point move from the entry point. The euro is likely to strengthen today if the U.S. data comes in weaker than expected.
Important: Before buying, make sure that the MACD indicator is above the zero line and is just beginning to move higher from it.
Scenario #2: I also plan to buy the euro if there are two consecutive tests of 1.1485 while the MACD indicator is in oversold territory. This will limit the pair's downward potential and trigger a bullish market reversal. In this case, a rise toward the opposite levels of 1.1506 and 1.1531 can be expected.
Sell SignalScenario #1: I plan to sell the euro after the price reaches 1.1485 (the red line on the chart). The target will be 1.1463, where I plan to exit short positions and immediately open long positions, expecting a 20–25 point rebound from that level. Selling pressure on the pair is likely to return if the U.S. data comes in stronger than expected.
Important: Before selling, make sure that the MACD indicator is below the zero line and is just beginning to move lower from it.
Scenario #2: I also plan to sell the euro if there are two consecutive tests of 1.1506 while the MACD indicator is in overbought territory. This will limit the pair's upward potential and trigger a bearish market reversal. In this case, a decline toward the opposite levels of 1.1485 and 1.1463 can be expected.
Important: Beginner Forex traders should exercise great caution when making market entry decisions. It is generally best to stay out of the market before the release of major economic reports in order to avoid sharp price swings. If you decide to trade during news releases, always use stop-loss orders to minimize potential losses. Without stop-loss orders, you can lose your entire trading account very quickly, especially if you do not apply proper money management and trade with excessively large position sizes.
Remember that successful trading requires a clear trading plan, such as the one outlined above. Making spontaneous trading decisions based solely on the current market situation is inherently a losing strategy for an intraday trader.