29.12.202506:32 Forex Analysis & Reviews: How to Trade the EUR/USD Currency Pair on December 29? Simple Tips and Trade Breakdown for Beginners

Trade Analysis for Friday:

1-Hour Chart of the EUR/USD Pair

The EUR/USD currency pair showed minimal movement, down 35 pips on Friday. Nothing interesting happened during the day, either in the world, the Eurozone, or the U.S. The market is currently focused on two topics: the holidays and the ceasefire between Ukraine and Russia. However, the first factor significantly reduces the desire to trade, while the second is so tenuous that traders are hesitant to act on it. In any case, we believe there will be no strong movements this week, as the macroeconomic and fundamental backdrop is absent, with New Year's celebrated on Wednesday and Thursday a holiday. Thus, the current week again has a truncated status, with virtually no drivers for movement.

5-Minute Chart of the EUR/USD Pair

On the 5-minute timeframe, no trading signals were generated on Friday, as the price did not react to any levels or areas during the day. Therefore, novice traders had no grounds to open trades. This could be beneficial, as market volatility is extremely weak due to the holidays.

How to Trade on Monday:

On the hourly timeframe, the EUR/USD pair continues to form an upward trend. The price may soon test the 1.1800-1.1830 area, the upper boundary of the flat on the daily timeframe. It is quite possible that this time we may see a breakout from the six-month sideways channel. The overall fundamental and macroeconomic backdrop remains very weak for the U.S. dollar; we expect growth in the pair in the medium term.

On Monday, novice traders can trade from the area of 1.1745-1.1754. A bounce from this area will make long positions relevant, targeting 1.1808. A break below this area will allow for opening shorts with a target at 1.1666.

On the 5-minute timeframe, the following levels should be considered: 1.1354-1.1363, 1.1413, 1.1455-1.1474, 1.1527-1.1531, 1.1550, 1.1584-1.1591, 1.1655-1.1666, 1.1745-1.1754, 1.1808, 1.1851, 1.1908, and 1.1970-1.1988. On Monday, no significant events or reports are scheduled in either the Eurozone or the U.S. Thus, we can again expect very weak movements today.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair may form numerous false signals or none at all. At the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the beginning of the European session and the middle of the American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferred to trade only when there is good volatility and a trend confirmed by the trend line or channel, using signals from the MACD indicator.
6. If two levels are too close to each other (5 to 20 pips), they should be viewed as a support or resistance area.
7. Upon moving 15 pips in the right direction, set the Stop Loss to breakeven.

Chart Explanations:

• Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed near them.
• Red Lines: Channels or trend lines that reflect the current trend and indicate the preferred direction for trading.
• MACD Indicator (14, 22, 3): A histogram and signal line; a supplementary indicator that can also be used as a source of signals.

Important Note: Significant speeches and reports (always included in the news calendar) can greatly influence the movement of the currency pair. Therefore, during their release, it is advisable to trade cautiously or exit the market to avoid sharp reversals against the preceding movement.

Remember: For beginners trading in the Forex market, it is important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.