23.12.202507:36 Forex Analysis & Reviews: How to Trade the EUR/USD Currency Pair on December 23? Simple Tips and Trade Analysis for Beginners

Trade Analysis for Monday:

1H Chart of the EUR/USD Pair

The EUR/USD currency pair unexpectedly began to rise on Monday. This was surprising on both fundamental and macroeconomic grounds, especially given that it is the start of the Christmas week. On Monday, there were no important events or reports scheduled in the Eurozone or the US; nevertheless, the European currency appreciated by 70 pips. For us, any increase in the EUR/USD pair is logically expected. Moreover, we warned that in the context of a "thin" market, volatile trend movements are even more likely than in recent weeks and months, making it easier to move the price. From a technical standpoint, the pair settled above two descending trend lines in the morning while maintaining the relevance of a long-term ascending trend line. Therefore, novice traders could have opened long positions at the very start of the movement. The pair is once again approaching the upper line of the sideways channel 1.1400-1.1830 on the daily timeframe and has every chance of breaking through this time. We consider it possible that the end of the six-month flat phase may coincide with Christmas and the New Year.

5M Chart of the EUR/USD Pair

On the 5-minute timeframe, two buy signals were generated on Monday. First, the pair broke above the area of 1.1745-1.1754 and then bounced off it from above. Thus, novice traders could open another long position if they missed the first opportunity, based on the signal from the hourly timeframe.

How to Trade on Tuesday:

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, which marks the upper boundary of the flat on the daily timeframe. This time, we may witness a breakout. The overall fundamental and macroeconomic background remains very weak for the US dollar; therefore, we expect the pair to rise in the medium term.

On Tuesday, novice traders can trade in the area of 1.1745-1.1754. Two buy signals have already been formed on Monday. In a "thin" market, the growth may continue on Tuesday. However, today there will also be macroeconomic events, so a market reaction should be expected—any kind of reaction.

On the 5-minute timeframe, levels to consider include 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 Tuesday, there are no important events or reports scheduled in the Eurozone, while the US will release reports on GDP, industrial production, and durable goods orders. These are quite important reports, so a market reaction to them should be anticipated.

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.