Analysis and trading recommendations for the EUR/USD pair on December 28

Analysis of transactions in the EUR / USD pair

A sell signal emerged on the EUR / USD pair last Thursday. However, the MACD line was on a negative value, which suggests that it would be unprofitable to open short positions in the market. The signal appeared after the quote reached 1.2193, but a strong downward move did not happen. More attentive traders might have realized that it would be better to skip this trade, since the MACD had already moved down from zero, which indicated that the euro is oversold.

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Trading recommendations for December 28

Since today is the first trading day after Christmas, no one is expecting any huge changes in the EUR / USD pair. To add to that, the current epidemiological situation in Europe did not affect the market in any way, even if the news indicated that the new coronavirus strain has reached the EU. Apparently, everyone is satisfied that COVID-19 vaccinations have begun, as the current strain is the one that poses a more serious threat at the moment.

Anyhow, in the afternoon, a report on Germany's CPI will be released, and traders should pay attention to it as it may become a driver for the EUR / USD pair.

For long positions:

Buy the euro when the quote reaches 1.2222 (green line on the chart), and then take profit around the level of 1.2270. However, growth can only happen if there is good economic data from Germany.

Of course, keep in mind that before buying, make sure that the MACD line is above zero and is starting to rise from it.

For short positions:

Sell the euro after the quote reaches 1.2193 (red line on the chart), and then take profit at the level of 1.2144. Demand for risky assets will most likely increase this week, therefore, be very careful when opening short positions.

Also, keep in mind that before selling, make sure that the MACD line is below zero and is starting to move down from it.

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What's on the chart:

The thin green line is the key level at which you can place long positions in the EUR/USD pair.

The thick green line is the target price, since the quote is unlikely to move above this level.

The thin red line is the level at which you can place short positions in the EUR/USD pair.

The thick red line is the target price, since the quote is unlikely to move below this level.

MACD line - when entering the market, it is important to be guided by the overbought and oversold zones.

Important: Novice traders need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp fluctuations in the rate. If you decide to trade during the release of news, then always place stop orders to minimize losses. Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes.

And remember that for successful trading, you need to have a clear trading plan. Spontaneous trading decisions based on the current market situation is an inherently losing strategy for an intraday trader.

The material has been provided by InstaForex Company - www.instaforex.com