FX.co ★ EUR/USD: Simple Trading Tips for Beginner Traders on December 16. Analysis of Yesterday's Forex Trades

Analysis of Trades and Advice on Trading the Euro

The price test at 1.1752 coincided with the MACD indicator just starting to move upwards from the zero mark, confirming a good entry point to buy euros. As a result, the pair rose by 15 pips.

Yesterday marked further strengthening of the euro against the US dollar. The statement from Christopher Waller, a Federal Reserve representative, that the central bank is on the right track to support the economy, along with weak US data, exerted additional pressure on the dollar. However, caution is essential; there are many important reports ahead from both the Eurozone and the US, and everything could change at any moment.

This morning, several key economic indicators from the Eurozone are expected to be published. A series of reports will begin with the PMI indices for the services and manufacturing sectors and the composite PMI, and conclude with the release of the ZEW economic sentiment indicators for the Eurozone and Germany. Investors and analysts will closely analyze these data, as they can provide crucial insights into the region's current economic state and near-term prospects. Unexpected changes in these figures could lead to fluctuations in financial markets and impact the value of the euro. In particular, the PMI index for the manufacturing sector is a vital leading indicator of business activity, with a reading above 50 indicating expansion, and below signaling a contraction in production. In turn, the ZEW Economic Sentiment Index reflects analysts and investors' expectations regarding future economic conditions, serving as an indicator of market participants' optimism or pessimism. A significant improvement in this index could indicate a rise in confidence, supporting the euro towards new highs. Weak data from these indicators could severely limit the upside potential of the EUR/USD pair.

Regarding the intraday strategy, I will primarily rely on scenarios No. 1 and No. 2.

Buy Scenarios

Scenario No. 1: Today, the euro can be bought upon reaching around 1.1756 (the green line on the chart), targeting growth to the level of 1.1775. At point 1.1775, I plan to exit the market and also sell euros in the opposite direction, expecting a move of 30-35 pips from the entry point. We can expect the euro to rise only after good reports. Important! Before buying, ensure the MACD indicator is above the zero mark and just starting an upward move.

Scenario No. 2: I also plan to buy euros today if there are two consecutive tests of the price at 1.1747 while the MACD indicator is in the oversold area. This will limit the pair's downside potential and lead to an upward reversal in the market. We can expect growth to the opposite levels of 1.1656 and 1.1775.

Sell Scenarios

Scenario No. 1: I plan to sell euros once the price reaches 1.1747 (the red line on the chart). The target will be 1.1731, where I plan to exit the market and immediately buy in the opposite direction (targeting a move of 20-25 pips in the reverse direction from the level). Pressure on the pair will return with weak data. Important! Before selling, ensure the MACD indicator is below the zero mark and just starting its downward move.

Scenario No. 2: I also plan to sell euros today if there are two consecutive tests of the price at 1.1756 while the MACD indicator is in the overbought area. This will limit the pair's upside potential and lead to a market reversal downwards. We can expect a decrease to the opposite levels of 1.1747 and 1.1731.

What's on the Chart:

• Thin green line – entry price at which you can buy the trading instrument;
• Thick green line – estimated price where you can set Take Profit or take profit yourself, as further growth above this level is unlikely;
• Thin red line – entry price at which you can sell the trading instrument;
• Thick red line – estimated price where you can set Take Profit or take profit yourself, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it is essential to be guided by overbought and oversold zones.

Important: Beginner traders in the Forex market need to make entry decisions with great caution. It is best to stay out of the market before significant fundamental reports to avoid sudden price fluctuations. If you choose to trade during news releases, always set stop orders to minimize losses. Without setting stop orders, you can quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember, successful trading requires a clear trading plan, like the one presented above. Spontaneous trading decisions based on the current market situation are inherently a losing strategy for the intraday trader.