What to watch on January 22? Breakdown of fundamental events for beginners

[Ben Graham]

Analysis of macroeconomic reports:

A number of macroeconomic releases are scheduled for Thursday, but many of them have only a loud label and are unlikely to provoke strong market reactions in practice. The most interesting report is the third estimate of Q3 GDP in the US. Previous estimates showed high figures, but traders doubt the accuracy of those numbers. Economic growth can be achieved in various ways; currently, the US economy is growing not on the basis of high demand, rising prosperity, or increased industrial production. In addition to GDP, the producer price index will be published, which, for some reason, many treat as an important report on a par with inflation. The other releases attract much less interest. The UK and EU calendars are empty today.

Analysis of fundamental events:

Several fundamental events are scheduled for today, but all the most important events occurred yesterday. In his customary manner, Donald Trump imposed tariffs and, three days later, cancelled them after the opposing side made concessions. It remains unclear what those concessions were and what NATO Secretary-General Mark Rutte and Donald Trump agreed on. However, if the US president backed away from his threats, it means the proposed terms for joint use of Greenland satisfy him. Or it was another bluff.

General conclusions:

During the penultimate trading day of the week, both currency pairs may resume upward movement, since downtrends were broken this week for both the euro and the pound. The euro can be traded today in the 1.1655–1.1666 range, and the pound sterling in the 1.3437–1.3446 range.

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