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05.12.202507:03 Forex Analysis & Reviews: How to Trade the EUR/USD Currency Pair on December 5? Simple Tips and Trade Analysis for Beginners

Relevance up to 22:00 2025-12-05 UTC--5

Trade Analysis for Thursday:

1H Chart of the EUR/USD Pair

Exchange Rates 05.12.2025 analysis

The EUR/USD currency pair traded once again in a "neither fish nor fowl" style on Thursday. The macroeconomic backdrop throughout the day was very weak, so the market found no grounds to open new positions. Overall, this week we have already seen several important reports, most of which have had no impact. Almost all European reports (some quite significant) were ignored by the market, while the American reports were somewhat contradictory and provoked a mixed market reaction. For example, the important ISM Manufacturing Index was worse than expected, while the similar index for the services sector exceeded traders' expectations. The key report is rightly considered the ADP report, although it is usually not deemed significant, even with a stretch. However, it is currently the only indicator that allows for some idea of the state of the US labor market. The indicator failed, and the dollar continues its decline as expected. The flat pattern on the daily timeframe remains relevant, so the pair's volatility remains low.

5M Chart of the EUR/USD Pair

Exchange Rates 05.12.2025 analysis

On the 5-minute timeframe, two trading signals were generated throughout Thursday. First, the pair bounced off the area of 1.1655-1.1666, and then broke through it. In both cases, the price failed to move up even 15 pips to place a Stop Loss at breakeven. The total volatility yesterday was 40 pips.

How to Trade on Friday:

On the hourly timeframe, the EUR/USD pair continues to form an upward trend. The overall fundamental and macroeconomic background remains very weak for the US dollar; therefore, we expect further growth. Even technical factors currently support the euro, as the flat pattern on the daily timeframe persists, and after turning around near the lower boundary, it is reasonable to expect a rise to the upper boundary.

On Friday, novice traders may again trade from the area of 1.1655-1.1666, as there are simply no other options. A bounce from this area downwards will allow for opening short positions with a target of 1.1584-1.1591. A consolidation above this area will lead to long positions with a target of 1.1745.

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 Friday, the Eurozone is scheduled to release its third-quarter GDP report. In the US, personal income and expenditures of American consumers, the core personal consumption expenditures price index, and the University of Michigan consumer sentiment index will be published. None of these reports is considered important, but they can provoke a certain market reaction.

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.

*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
© 2007-2025
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