Trade analysis and tips for the euro

The test of 1.1257 came as the MACD indicator moved well below the zero line, limiting the pair's downside potential.

Yesterday's euro decline unfolded in two stages, each weighing on the single currency in its own way. In the morning, the market focused on France, where approval of the 2027 budget turned into a full political crisis. Traders reacted by selling the euro, pricing in the risk that budgetary disagreements could have more serious consequences for the country's fiscal stability and, in turn, confidence in the single currency. In the second half of the day, US data took over the initiative and worked against the euro from the other side. Initial jobless claims in the US fell by 1,000 to 198,000 — a simple indicator: the lower, the stronger the labor market. Later, the September ISM manufacturing report showed 54.5 versus 54.6 in August — the ninth month in a row above 50, signaling expansion, albeit with a slight slowdown.

Today the euro gets a chance to recover through the inflation channel: the key event in the first half of the day is the September eurozone CPI report. Consensus expects headline CPI to accelerate to 3.7%, while the core measure — more important for the European Central Bank — is forecast at 2.5%. The difference matters because the ECB looks at core inflation, excluding food and energy, when judging persistent price pressure. If numbers beat expectations, investors will start pricing in a higher probability of an ECB rate rise, and tightening expectations tend to strengthen the currency. I believe today's stats can offset some of the political negativity the euro has accumulated amid political instability in France and the approval of the 2027 budget.

For intraday strategy, I will mainly rely on Scenario 1 and Scenario 2 below.

Buy Scenarios

Scenario 1: Buy the euro today if the price reaches around 1.1266 (green line on the chart) with a target of 1.1283. Plan to exit at 1.1283 and sell the euro on a reversal, expecting 30–35 pips from the entry. Expect euro strength only after a strong data beat. Important: before buying, ensure MACD is above zero and only beginning its rise.

Scenario 2: Also buy the euro if there are two consecutive tests of 1.1246 while MACD is in the oversold area. This would limit downside potential and lead to an upward reversal. Expect moves toward 1.1266 and 1.1283.

Sell Scenarios

Scenario 1: Sell the euro after it reaches 1.1246 (red line on the chart). Target 1.1218, where I plan to exit and immediately buy the reverse, expecting a 20–25 pip countermove. Pressure will return on weak data. Important: before selling, ensure MACD is below zero and only beginning to fall.

Scenario 2: Also sell if there are two consecutive tests of 1.1266 while MACD is in the overbought area. This would cap upside and trigger a downward reversal. Expect declines to 1.1246 and 1.1218.

What's on the chart:

Thin green line – entry price at which you can buy the trading instrument.

Thick green line – approximate price where you can place Take Profit or manually lock in profits, since further upside above this level is unlikely.

Thin red line – entry price at which you can sell the trading instrument.

Thick red line – approximate price where you can place Take Profit or manually lock in profits, since further downside below this level is unlikely.

MACD indicator. When entering the market, it is important to follow the overbought and oversold zones.

Important. Beginner traders in the Forex market must be very cautious when making entry decisions. It is best to stay out of the market before the release of important fundamental reports to avoid getting caught in sharp price swings. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders,, you can quickly lose your entire deposit, especially if you don't use money management and trade large volumes.

Remember that successful trading requires a clear trading plan, like the example above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for an intraday trader.