What to Pay Attention to on December 22? Analysis of Fundamental Events for Beginners

[Ben Graham]

Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Monday. The only noteworthy release is the final estimate of UK GDP for the third quarter. It cannot be said that this report is secondary, but we do not expect a strong market reaction. Traders are already familiar with the first two estimates, and the third is unlikely to differ significantly from them. In the Eurozone and the U.S., the event calendars are empty.

Analysis of Fundamental Events:

No fundamental events are scheduled for Monday. Overall, the market currently has questions only for the Federal Reserve. The last meeting occurred recently, and since then, the U.S. has published data on the labor market, unemployment, and inflation, all of which have a significant impact on the Federal Reserve's monetary policy. Therefore, we do not have an updated perspective from Jerome Powell or other members of the FOMC. However, as mentioned earlier, there are no speeches from Fed officials planned for Monday. With the New Year approaching, many are going on holiday.

General Conclusions:

On the first trading day of the week, both currency pairs may exhibit low volatility and trade predominantly sideways. The EUR/USD pair will likely continue to trade near the 1.1745-1.1754 area, where new trading signals should be sought. The GBP/USD pair has been flat for seven days, so trading can only occur at the boundaries of the sideways channel at 1.3319-1.3446.

Key Rules of the Trading System:

1. The strength of a signal is assessed 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 any level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can create numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat.
4. Trades are opened during the period between the start of the European session and the middle of the American session, after which all trades must be closed manually.
5. On the hourly timeframe, when trading based on signals from the MACD indicator, it is preferable to trade only when good volatility is present, and a trend is confirmed by a trend line or channel.
6. If two levels are positioned too closely to each other (5 to 20 points), they should be viewed as a support or resistance area.
7. After moving 20 pips in the right direction, set the Stop Loss to breakeven.

Chart Explanation:

• 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 for trading.
• 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 important to understand that not every trade can be profitable. Developing a clear strategy and practicing money management are keys to long-term trading success.

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