What to Pay Attention to on January 27? Analysis of Fundamental Events for Beginners

[Ben Graham]

Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Tuesday, and none of them are significant. In essence, we can mention only two American reports—the weekly ADP report and the Conference Board (CB) Consumer Confidence Index. Both of these reports have little chance of influencing the dollar's movement throughout the day. Currently, the dollar is trading under the influence of completely different factors. The calendars for Germany, the UK, and the Eurozone are empty on Tuesday.

Analysis of Fundamental Events:

Among the key events on Tuesday, Christine Lagarde's speech stands out, but we want to remind you that there are currently no questions for the ECB from traders. Therefore, it is unlikely that Lagarde will surprise the market with anything. On the agenda remains Donald Trump's policy, which has started the new year without much delay. It is not out of the question that news will be coming from the White House every day or every other day. At this time, Canada may face tariffs of up to 100% as the US president has serious grievances against it over trade with China. Canadian Prime Minister Mark Carney has already stated that his country conducts trade with China, just like any other country. However, Trump believes that Ottawa is preparing to sign a free trade agreement, and China is going to "eat Canada." In general, a new series of the popular show "Trump's Adventures in the White House" is unfolding.

General Conclusions:

During the second trading day of the week, both currency pairs will be traded based on technical factors. The euro can be traded today at 1.1908 or in the 1.1830-1.1837 range, while the British pound can be traded at 1.3643-1.3652. Of course, the dollar will not simply decline every day. There will be pauses, corrections, and pullbacks. However, we still expect growth in the euro and pound in the medium term. Thus, potentially, long positions are much more relevant than shorts.

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