How to trade EUR/USD on January 5. Simple trading tips and analysis for beginners

EUR/USD was busy recovering from Tuesday's decline. We still don't know why the flat ended and why the euro sharply fell on Tuesday. But on Wednesday, the market showed that it was somewhat accidental. The pair was rising for most of the day. Take note that there was almost no macroeconomic background on Wednesday and it will be the same thing on Thursday. We can single out the US ISM Manufacturing PMI, which fell more than forecasted in December. But the US dollar slightly grew when that report was released. And all in all we can say that traders did not react to this report. So by the end of the day, the pair returned to the 1.0587-1.0657 horizontal channel. This doesn't indicate a renewal of the flat, but then again the pair did not continue its downward movement on Wednesday.

It was hard to expect strong signals since the upward movement only happened in the Asian trading session and the beginning of the European one, and then for the rest of the day the pair just went back to moving sideways. Actually, all the trading signals were formed in the 1.0587-1.0607 area. First the pair settled above this region, and then it rebounded from this area three times. It was only able to go up 15 pips in one case out of four, which was enough for the Stop Loss to be set to Breakeven. But at the same time, there was no sell signal, so no matter how many longs were opened, novice traders did not lose in any of them. Positions could be closed either manually or using Stop Loss at zero. Take note that beginners could work out only the first two signals, they turned out to be false, so all subsequent signals in this area should be ignored.

On the 30-minute chart, the pair sharply and unexpectedly ended the flat, but also quickly returned to the horizontal channel, in which it spent enough time before the New Year. I still expect the euro to fall. Since there were no fundamental and macroeconomic events before it started, we can expect its resumption any day. On the 5-minute chart on Thursday, it is recommended to trade at the levels 1.0433, 1.0465-1.0483, 1.0536, 1.0587-1.0607, 1.0657-1.0668, 1.0697, 1.0787-1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. There are no important events scheduled for Thursday in the European Union, meanwhile, we only have the manufacturing activity index in the US. There will be nothing to react to on Thursday, but that does not mean that a flat will necessarily occur during the day.

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.