EUR/USD: Tips for Beginner Traders for December 24th (U.S. Session)

[Ben Graham]

Trade Breakdown and Trading Advice for the European Currency

The test of the 1.1785 price level occurred at a moment when the MACD indicator had already moved far below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro.

The pre-holiday calm in the eurozone associated with the approaching Christmas has affected the volatility of the EUR/USD pair. When there is a lack of fundamental information, technical analysis becomes especially important. However, under conditions of limited liquidity supply, it is unlikely that one should expect any dramatic changes in the market.

In the second half of the day, weekly data on initial jobless claims in the United States are expected to be released. The likelihood that these data will have a significant impact on market dynamics is low. Most market participants will probably prefer to refrain from active trading operations, waiting for more meaningful news and assessments of the global economic outlook. Thus, today's U.S. unemployment data release appears to be more of a formal event than a real factor capable of changing the current market situation.

As for the intraday strategy, I will rely more on the implementation of Scenarios No. 1 and No. 2.

Buy Signal

Scenario No. 1: Today, buying the euro is possible if the price reaches the 1.1809 level (green line on the chart), with a growth target at 1.1855. At the 1.1855 level, I plan to exit the market and also sell the euro in the opposite direction, expecting a move of 30–35 points from the entry point. A strong rise in the euro can be expected within the trend after weak U.S. data. Important! Before buying, make sure that the MACD indicator is above the zero line and is just starting to rise from it.

Scenario No. 2: I also plan to buy the euro today in the event of two consecutive tests of the 1.1793 price level at a time when the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal upward. Growth toward the opposite levels of 1.1809 and 1.1855 can be expected.

Sell Signal

Scenario No. 1: I plan to sell the euro after the price reaches the 1.1793 level (red line on the chart). The target will be the 1.1750 level, where I intend to exit the market and immediately buy in the opposite direction (expecting a move of 20–25 points in the opposite direction from the level). Strong pressure on the pair is unlikely to return today.Important! Before selling, make sure that the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell the euro today in the event of two consecutive tests of the 1.1809 price level at a time when the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal downward. A decline toward the opposite levels of 1.1793 and 1.1750 can be expected.

What's on the Chart:

• Thin green line – entry price at which the trading instrument can be bought;
• Thick green line – estimated price where Take Profit can be set or profits can be fixed manually, as further growth above this level is unlikely;
• Thin red line – entry price at which the trading instrument can be sold;
• Thick red line – estimated price where Take Profit can be set or profits can be fixed manually, as further decline below this level is unlikely;
• MACD indicator – when entering the market, it is important to be guided by overbought and oversold zones.

Important. Beginner Forex traders need to be extremely cautious when making decisions about entering the market. Ahead of major fundamental reports, it is best to stay out of the market to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly—especially if you do not use money management and trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Spontaneous trading decisions based on the current market situation are an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com