FX.co ★ Trading plan for EUR/USD on December 25. Simple tips for beginners

Analyzing Friday's trades:

EUR/USD on 30M chart

EUR/USD showed volatility of 48 pips on Friday. We can say that market activity was negligible. On the one hand, this is not surprising due to the holiday week, during which nothing interesting will happen in the European Union, the United States, or the United Kingdom. However, despite the low volatility, the euro strengthened again. It rose against the macroeconomic backdrop, which is no longer surprising.

All the most interesting reports were published in America. The reports on the Personal Consumption Expenditures (PCE) Price Index and Personal Income/Expenditure of American consumers can be ignored. These reports had minimal deviations from their forecasts. On the other hand, the report on Durable Goods Orders turned out to be much higher than forecasts, and the University of Michigan Consumer Sentiment Index was simply higher. These two reports were expected to stir some market reaction and strengthen the dollar, but once again, nothing happened. The logic behind the movements is a bit unclear at the moment.

EUR/USD on 5M chart

On the 5-minute chart, the movement resembled more of a flat than a trend. Several trading signals were generated, but in each case, beginners could expect a profit of a maximum of 10-15 pips. The price bounced twice from the level of 1.1011 (this is one long position), then rebounded from the level of 1.1043 (this is the second short position), and that's it. Therefore, beginners could earn 20-30 pips on Friday.

Trading tips on Monday:

On the hourly chart, EUR/USD maintains an uptrend, which is now supported by the ascending trendline. However, if traders previously had good reasons to buy the euro, they didn't have any of those this time, but the euro still traded higher. We believe that the euro does not have enough reasons to rise further, but the market currently has a different opinion.

On Monday and throughout the week, we believe that you should be careful due to the holidays, and market volatility may decrease even further. Of course, this does not mean that there won't be any movements, but we shouldn't expect a macroeconomic and fundamental background.

The key levels on the 5M chart are 1.0611-1.0618, 1.0668, 1.0733, 1.0767-1.0781, 1.0835, 1.0896-1.0904, 1.0940, 1.0971-1.0981, 1.1011, 1.1043, 1.1091, 1.1132-1.1145. On Monday, there are no scheduled events in the European Union or the United States, not even a secondary one. There will be nothing to react to during the day. Monday may not just be a "boring Monday" but a "very boring Monday."

Basic trading rules:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.