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03.12.202408:48 Forex Analysis & Reviews: How to Trade the EUR/USD Pair on December 3? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades

1H Chart of EUR/USD

Exchange Rates 03.12.2024 analysis

The EUR/USD currency pair was trading down on Monday. Firstly, it should be noted that the euro has been trading between the levels of 1.0451 and 1.0596 for several weeks. Secondly, yesterday, the single currency fell almost all day, and this process started long before the first reports were published. Thirdly, macroeconomic data supported the dollar to a greater extent, so its growth was natural. Overall, we still see no reason for the pair to rise. At the same time, a technical correction might continue for some time—since corrections generally last longer than impulsive moves—the week's performance will ultimately depend on U.S. macroeconomic data. The first significant report, the ISM Manufacturing PMI, exceeded forecasts, supporting the dollar. We lean toward expecting further dollar growth, provided this week's key reports do not disappoint.

5M Chart of EUR/USD

Exchange Rates 03.12.2024 analysis

Two sell signals were formed on the 5-minute TF on Monday. First, the pair overcame the level of 1.0526 and then bounced from the same level from below. These signals were duplicates, so novice traders could open just one sell trade. Unfortunately, the price fell short of the 1.0451 target by about 10 pips. However, there was still ample time for traders to close their positions in profit.

Trading Strategy for Tuesday:

On the hourly timeframe, the EUR/USD pair still attempts to correct, but the euro can only hope for slight or slow upward movement. Over the coming days, the pullback may continue as the price on the weekly timeframe has reached the lower boundary of the horizontal channel—a target we've mentioned repeatedly. However, this does not guarantee the emergence of a new upward trend.

We believe the quote decline may continue on Tuesday, as the price has bounced off the 1.0596 level twice.

On the 5-minute TF, the levels of 1.0269-1.0277, 1.0334-1.0359, 1.0433-1.0451, 1.0526, 1.0596, 1.0678, 1.0726-1.0733, 1.0797-1.0804, 1.0845-1.0851, 1.0888-1.0896 should be considered. No significant events are scheduled in the Eurozone on Tuesday. In the U.S., the relatively important JOLTs job openings report will be released. However, since this report has a two-month lag, it holds less weight compared to reports like the unemployment rate.

Core Trading System Rules:

  1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
  3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
  4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
  5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
  6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
  7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2024
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