FX.co ★ How to trade EUR/USD on December 14. Simple trading tips and analysis for beginners

Analyzing Tuesday's trades:

EUR/USD on 30M chart

EUR/USD did not show any interest in being active on Tuesday. However, the US inflation report changed everything. I warned you about it - this report is now almost as important as the Federal Reserve meeting, because the monetary policy depends entirely on the inflation rate. The latest report showed us that the Fed is on the right track, as inflation slowed for the fifth consecutive time and fell to 7.1% y/y. Of course the 2% target is still a long way off, but still, the consumer price index is down steadily, which is very good for the U.S. economy. And bad for the U.S. dollar, which plummeted on Tuesday, as lower inflation means that the Fed will quickly abandon monetary policy tightening. That is, a major support factor for the U.S. currency in 2022 will be offset more quickly. There is still no trend in the 30-minute chart, although in general, the upward movement (if we go to higher charts) continues. However, the pair has been trading in a horizontal channel for more than a week, so it is impossible to draw a trend line or channel now.

EUR/USD on M5 chart

Speaking of trading signals, everything was just fine. The price bounced twice from 1.0535, forming two buy signals. In the first case, the pair went up only 15 points, so the Stop Loss was triggered at breakeven when the price returned to 1.0535. For the second time, it went up 15 points, and beginners could put a Stop Loss at breakeven before the release of the US inflation report. Therefore, there was no risk in this transaction. As you can see, the pair continued to rise and reached 1.0663, from which it rebounded. Therefore, at this moment it was necessary to close the longs, the profit was about 90 points. The sell signal also had to be worked out, but it was not clear-cut, since the price immediately turned out to be near 1.0636, but could not settle below it. Therefore, it was possible to open short positions after settling below 1.0636. However, this signal turned out to be false and beginners received a small loss on it. But in total, the day ended with good profit.

Trading tips on Wednesday:

The uptrend has been canceled on the 30-minute chart, but the upward movement as a whole continues. So that's the paradox. Remember that Tuesday's upward movement was provoked entirely by the US inflation report. EUR could fall on Wednesday, as the results of the Fed meeting will be summed up in the evening. Although there is a high chance that they will be dovish, the dollar's growth cannot be ruled out. On the 5-minute chart on Wednesday, it is recommended to trade at the levels of 1.0465-1.0483, 1.0535, 1.0582-1.0607, 1.0636, 1.0663, 1.0697, 1.0765, 1.0787 and 1.0806. As soon as the price passes 15 pips in the right direction, you should set a Stop Loss to breakeven. On Wednesday, the European Union will publish the report on industrial production, which seems insignificant in the light of the week's events. Meanwhile, in the US, the results of the Fed meeting will be announced in the evening.

Basic rules of the trading system:

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.

On the chart:

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.