What to Pay Attention to on November 4? Analysis of Fundamental Events for Beginners

[Ben Graham]

Analysis of Macroeconomic Reports:

There are no macroeconomic reports scheduled for Tuesday, and on Monday, even significant reports did not provoke any market reaction, let alone the expected movements. Both currency pairs remain "at the bottom" but show no desire to move upward, even within the framework of a correction. Therefore, today, with an effectively absent macroeconomic backdrop, strong trending movements are unlikely—unless Donald Trump throws in another "information bomb."

Analysis of Fundamental Events:

There are several fundamental events scheduled for Tuesday, but they do not generate much interest. In the morning, Christine Lagarde, the President of the European Central Bank, will make a double appearance; however, the ECB held a meeting just last week, so the market has already received all the necessary information. What new information could Lagarde provide just days after the central bank's meeting? The latest inflation report did not affect the ECB's monetary policy outlook, as the level remains around the target of 2%. Any fluctuations in inflation around this target level hold virtually no significance. The ECB made it clear last week that there are no grounds for lowering or raising the key interest rate in the near future.

General Conclusions:

During the second trading day of the week, both currency pairs may again trade chaotically and with low volatility. The euro could form new signals around the 1.1527 level, but on Monday, all signals yielded no profit due to low volatility. The British pound could bounce for a third or fourth time from the area of 1.3102-1.3107, allowing consideration of long positions targeting 1.3203.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it took to form (bounce or breach a level). The less time required, the stronger the signal.
2. If two or more trades around any level were based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate numerous false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trades should be opened during the timeframe between the start of the European session and halfway through the American session; all trades must then be manually closed.
5. On the hourly timeframe, signals from the MACD indicator should ideally be traded only in the presence of good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (between 5 and 20 pips), they should be treated as a support or resistance area.
7. After the price moves 15-20 pips in the right direction, a Stop Loss should be set to break even.

What the Charts Show:

• Support and resistance price levels are targets for opening buy or sell positions. Take profit levels can be placed near these.
• The red lines indicate channels or trend lines that show the current trend and suggest the preferred trading direction.
• The MACD indicator (14,22,3) provides a histogram and signal line, serving as an auxiliary indicator that can also be used as a source of signals.

Important: Significant speeches and reports (always listed in the news calendar) can have a significant impact on the movement of the currency pair. Therefore, during their release, one should trade with maximum caution or exit the market to avoid sudden price reversals against the preceding movement.

Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.

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