What to watch on January 19? Analysis of fundamental events for beginners

[Ben Graham]

Breakdown of macroeconomic reports:

There are very few macroeconomic releases scheduled for Monday. The only item to highlight is the EU consumer price index for December, which will be published in a second estimate. Recall that the second inflation estimate rarely differs from the first. The EU's inflation figure is not currently a problem for the euro and is not a major event for traders. This is because inflation in the EU has been consistently around the ECB's target for the past 6 months. Therefore, it does not influence the European Central Bank's monetary policy. In the United States and the United Kingdom, the events calendar for January 19 is empty.

Analysis of fundamental events:

No fundamental events are scheduled for Monday, but the market still does not react to important macroeconomic reports that shape the sentiment of the central banks of the UK, the EU, and the US. There is practically no reaction to fundamental events. Otherwise, Donald Trump's actions would already have led to a total collapse of the US dollar, which has been brewing for several months. Recall that the dollar can still be considered a safe currency for investors, but can a currency be considered safe if its country's president openly speaks of annexing Greenland or of the need to intervene in a coup in Iran? Trump seems to have abandoned an airstrike on Iran after receiving a message from Tehran about ending the killings of protesting citizens. But the "clouds" over Greenland continue to thicken. Trump calls Greenland a "US national security issue" and fears for it, saying it should become part of America as a new state.

General conclusions:

On the first trading day of the week, both currency pairs may continue trading completely randomly and with minimal volatility. The euro can be traded today in the 1.1655–1.1666 area, and at night, beginner traders can open longs. The pound sterling can be traded today between 1.3437 and 1.3446 and 1.3319–1.3331.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate a mass of false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should ideally be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After a move of 15–20 pips in the correct direction, set the Stop Loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.

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