What to Pay Attention to on December 23? Analysis of Fundamental Events for Beginners

[Ben Graham]

Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Tuesday, particularly in the United States. Reports on GDP (second estimate for the third quarter), industrial production, and durable goods orders will be released. Among this list, the GDP report is the least interesting, as the second estimate is objectively less significant than the first or third. However, the reports on industrial production and durable goods orders may provoke a market reaction. The event calendars for the UK and the Eurozone are empty today.

Analysis of Fundamental Events:

No fundamental events are planned for Tuesday. Overall, the market's current questions may be directed only at the Federal Reserve. The last meeting took place recently, but afterwards, data on the labor market, unemployment, and inflation were released in the US, which significantly impacts the Fed's monetary policy. Thus, we do not have an updated perspective from Jerome Powell or other members of the FOMC. However, as already mentioned, there are no scheduled remarks from Fed officials on Tuesday. With the holidays approaching, many politicians, officials, and staff are taking time off.

General Conclusions:

On the second trading day of the week, both currency pairs may continue their upward movements, but today's US macroeconomic backdrop could influence the dollar's movement. The EUR/USD pair may continue to rise following the formation of two buy signals in the 1.1745-1.1754 range. The GBP/USD pair may continue its upward move after breaking out of the sideways channel and generating a buy signal in the 1.3437-1.3446 area.

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 it takes, the stronger the signal.
2. If two or more trades were opened near a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of 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 time between the start of the European session and mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, using signals from the MACD indicator, it is preferable to trade only when good volatility exists, and a trend is confirmed by a trend line or channel.
6. If two levels are too close to each other (5 to 20 pips), they should be viewed as an area of support or resistance.
7. After moving 15-20 pips in the right direction, a Stop Loss should be set 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 to trade.
• 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 crucial to understand that not every trade can be profitable. Developing a clear strategy and implementing sound money management are keys to successful long-term trading.

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