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24.12.202408:05 Forex Analysis & Reviews: How to Trade the EUR/USD Pair on December 24? Simple Tips and Trade Analysis for Beginners

Analysis of Monday's Trades

1H Chart of EUR/USD

Exchange Rates 24.12.2024 analysis

On Monday, the EUR/USD currency pair performed exactly as we expected. In our previous articles, we pointed out that Friday's rally in the euro was illogical, making a return to earlier levels likely. This proved to be the case. Although the euro did not reach the 1.0359 level, it has a strong chance of doing so today. This level now acts like a magnet for the price. The downward trend remains intact across all timeframes, indicating that this level will likely be breached, aligning with our expectations. We continue to foresee the euro declining into the 1.00–1.02 range. On Monday, there were no significant events in either the U.S. or the Eurozone, which left us with little to react to or analyze. The fundamental and macroeconomic backdrop for this week is expected to remain weak.

5M Chart of EUR/USD

Exchange Rates 24.12.2024 analysis

On the 5-minute timeframe on Monday, one sell signal was generated. During the European trading session, the price rebounded for the second consecutive time from the 1.0433–1.0451 range, resulting in a 30-pip decline. Although volatility was moderate and the nearest target area was not reached, the signal remains valid, indicating that short positions can still be maintained.

Trading Strategy for Tuesday:

On the hourly timeframe, EUR/USD has been trading sideways for nearly three weeks. However, the results from the Federal Reserve meeting triggered a strong market reaction, breaking this period of stagnation. We believe that the euro's downtrend has resumed. During the upcoming holiday weeks, the market may enter another flat phase or undergo a correction. Nonetheless, we expect the price to revisit the key level of 1.0334–1.0359.

On Tuesday, the pair may continue its decline towards the 1.0334–1.0359 zone, which is currently our target.

On the 5-minute timeframe, consider the following levels: 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, and 1.0888–1.0896. No significant events or reports are scheduled in the Eurozone on Tuesday. However, in the U.S., a report on durable goods orders will be released, which is an important report that could provoke a market reaction.

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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