FX.co ★ EUR/USD: Simple Trading Tips for Beginner Traders on September 2. Analysis of Yesterday's Forex Trades

Trade Analysis and Tips for the European Currency

The price test at 1.1602 occurred as the MACD indicator was beginning to move upward from the zero mark, confirming the correct entry point to buy euros. However, even with weak data, the euro only moved up about 7 pips.

Weak U.S. reports failed to weaken the dollar, as the market chose to focus not on data but on the Middle East. The ISM manufacturing index fell to 54.6%, with all of its internal components declining, while the price index remained high at 71.1%, matching July's figure. Labor market data added to concerns, as hiring fell to 5.1 million, with professional and business services losing 188,000 jobs, and June's vacancies were revised downward. Under normal circumstances, such data would have weakened the dollar by lowering expectations for the Federal Reserve's hawkish policy.

However, the entire market's focus shifted to the Strait of Hormuz, where tensions escalated sharply. After the U.S. strike on an island in the strait, the dollar gained support as a safe-haven asset, while the threat of oil supply disruptions added an inflationary channel.

Today, the euro enters the first half of the day with a sparse agenda, where the only item is the change in the number of unemployed people in Spain. Employment data help assess the state of the Spanish economy. Still, their weight in the currency market is low, and they typically do not provoke a significant reaction in the single currency. Therefore, it is unlikely this release will set the direction for the euro. This is why the EUR/USD pair has a chance for a slight recovery after another sell-off. In the absence of strong internal drivers and with a relatively calm background, the single currency may recover some of its recent losses, depending on overall risk appetite.

Regarding the intraday strategy, I will focus on implementing scenarios #1 and #2.

Buy Scenarios

Scenario #1: Today, I plan to buy euros when the price reaches around 1.1591 (the green line on the chart), targeting a move toward 1.1622. At 1.1622, I intend to exit the market and sell euros immediately in the opposite direction, anticipating a movement of 30-35 pips from the entry point. The euro's growth can only be expected after very strong data. Important! Before buying, ensure that the MACD indicator is above the zero mark and just starting to rise from it.

Scenario #2: I also plan to buy euros today in the event of two consecutive tests of 1.1577, with the MACD indicator in the oversold area. This will limit the pair's downside potential and lead to an upward market reversal. Growth can be expected towards opposing levels of 1.1591 and 1.1622.

Sell Scenarios

Scenario #1: I plan to sell euros once the price reaches 1.1577 (the red line on the chart). The target will be 1.1552, where I plan to exit the market and buy immediately in the opposite direction (anticipating a move of 20-25 pips in the opposite direction from the level). Pressure on the pair will return today with weak data. Important! Before selling, ensure that the MACD indicator is below the zero mark and just starting to decline from it.

Scenario #2: I also plan to sell euros today in the event of two consecutive tests of 1.1591, with the MACD indicator in the overbought area. This will limit the pair's upward potential and lead to a downward market reversal. A decline can be expected towards opposing levels of 1.1577 and 1.1552.

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.