Trade Review and Tips for Trading the European Currency

The price test at 1.1089 occurred as the MACD indicator began moving down from the zero line, confirming a good entry point to sell the euro. As a result, the pair fell by more than 30 pips.

The dollar rose, and we should start with US figures released on Thursday. Initial jobless claims — the number of people filing for benefits for the first time after job loss — increased to 200K versus 195K expected and 191K a week earlier. But continuing claims fell to 1,697K against expectations of 1,720K, so the labor market remains firm and there are no serious employment problems yet. Existing-home sales fell to 3.75M versus a forecast of 3.85M (-5.5% month-on-month), which I view as a consequence of higher borrowing costs. The budget deficit in October was $404.1bn versus an expected $298.6bn.

For the Federal Reserve, however, its officials' words matter more now—and they were hawkish. Mary Daly said rates will need to be raised further because price pressures have spread beyond sectors tied to tariffs and oil, and firms are increasingly passing costs on to consumers. John Williams said inflation is too high even in the latest data and that action will be needed over time to bring it back to 2% promptly and durably. Separately, Fed governor Michael Barr spoke in a different vein: he did not discuss rates. Still, he warned that the rapid spread of AI could deepen inequality and cause serious labor-market shocks in the foreseeable future. His logic is that market power will concentrate in a handful of firms, the share of wages in national income will fall, and the severity of consequences will depend on the protections put in place now. He gave no forecasts for the economy or rates, so his remarks are more about economic structure than a market cue. By contrast, on September 1 Barr said the Fed needed to be ready to raise rates because high inflation might become entrenched.

I see an important detail here. AI growth also implies higher inflation, because building data centers creates huge demand, and Austan Goolsbee on November 9 already called this an old-fashioned demand overheat — something central banks typically respond to with tightening. Lisa Cook has also warned that AI could become an additional source of inflation in 2027. So AI does not weaken the hawks; it gives them new arguments.

This morning the euro will get its own drivers, chiefly the revised euro-area Q3 GDP estimate, which is expected to be unchanged at the preliminary 0.4%. On October 30, the preliminary figure surprised to the upside (0.4% vs. 0.2 expected), though it was below Q2's 0.6%; if the revision holds, the picture of gradually cooling growth remains. Employment for the same period is forecast to rise 0.2% after 0.1% previously, and the euro-area goods trade balance will also be released.

For intraday strategy, I will mainly rely on the implementation of Scenarios No. 1 and No. 2.

Scenarios to Buy

Scenario No. 1: Today you can buy the euro when the price reaches around 1.1069 (green line on the chart), targeting a rise to 1.1100. At 1.1100, I plan to exit the market and also sell the euro in the opposite direction, expecting a 30–35 pip move from the entry point. Expect euro strength today only after good data. Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also intend to buy the euro today in the event of two consecutive tests of 1.1055 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal. You can expect a rise to the opposite levels of 1.1069 and 1.1100.

Scenarios to Sell

Scenario No. 1: I plan to sell the euro after it reaches the 1.1055 level (red line on the chart). The target will be 1.1025, where I plan to exit the market and immediately buy in the opposite direction (expecting a 20–25 pip move away from the level). Pressure on the pair will return in case of weak data. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to fall from it.

Scenario No. 2: I also intend to sell the euro today in the event of two consecutive tests of 1.1069 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a downward reversal. You can expect a decline to the opposite levels of 1.1055 and 1.1025.

What's on the Chart:

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

Thick green line – the suggested price where you can place a Take Profit or manually lock in gains, since further upside above this level is unlikely;

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

Thick red line – the suggested price where you can place a Take Profit or manually lock in gains, 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 Forex traders must be very cautious when making entry decisions. Before the release of important fundamental reports, it is best to stay out of the market 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, successful trading requires a clear trading plan, like the example I presented above. Spontaneous trading decisions based on the current market situation are a losing strategy for an intraday trader from the start.