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06.12.202408:11 Forex Analysis & Reviews: How to Trade the EUR/USD Pair on December 6? Simple Tips and Trade Analysis for Beginners

Analysis of Thursday's Trades

1H Chart of EUR/USD

Exchange Rates 06.12.2024 analysis

The EUR/USD currency pair continued trading within a horizontal channel on Thursday, a pattern that has become visible. As anticipated, the price has remained between 1.0451 and 1.0596 for two weeks, with the correction proving weak and slow. Despite this week's robust macroeconomic and fundamental backdrop, the pair has not managed to break out of its range.

Plenty of news and reports have been released this week, and while market volatility hasn't been exceptionally low—markets have responded to events—the pair remains in a pure flat trend. This type of movement is always a challenge for traders. Currently, the price is near the upper boundary of the range, making it reasonable to expect a bounce and a new downward move. However, today's key reports on U.S. labor and unemployment markets could spark significant market reactions, and it's unclear whether this will favor the U.S. dollar.

5M Chart of EUR/USD

Exchange Rates 06.12.2024 analysis

On the 5-minute time frame Thursday, only one trading signal was generated. Throughout the European session, the price traded near the 1.0526 level before eventually moving upward, almost reaching the target level at 1.0596, which acts as the upper boundary of the horizontal channel. This would have been an excellent point to close long positions and even consider opening short ones. As we approach the U.S. session today, if the price is within 20–30 pips of the 1.0596 level, a trade can be shifted to break even to reduce risk and await the release of U.S. reports.

Trading Strategy for Friday:

The pair is still in a corrective phase on the hourly timeframe, but EUR/USD is likely to see only limited or slow upward movements. For two weeks, the price has remained within the 1.0451–1.0596 range, reflecting traders' hesitation to buy the euro even after a two-month decline.

On Friday, we believe the pair's downward movement could resume, mainly if the price bounces off the upper boundary of the horizontal channel. However, flat trends are inherently random, an important factor to consider.

On the 5-minute TF, we should consider 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. In the Eurozone, only the final Q3 GDP report is scheduled for release, and it is unlikely to influence the market unless the data significantly deviates from expectations. In the U.S., critical reports will be published, including Wages, Labor market data, Unemployment rate, and Consumer sentiment.

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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