Forex Analysis & Reviews: 26.09.2023 - What to pay attention to on...

26.09.2023 02:53 PM

What to pay attention to on September 26th? Analysis of fundamental events for beginners

Review of macroeconomic reports:

There will be virtually no macroeconomic events on Tuesday. Event calendars for the UK, the EU, and Germany are 100% empty. The only thing worth noting is the report on new home sales in the US, which has a very low chance of triggering a market reaction. Thus, today, we are facing a practically empty day, but yesterday, the European currency showed that it is ready to trade even without a strong macroeconomic background. However, this is accidental, so we anticipate low volatility today for both pairs.

Review of fundamental events:

Among the fundamental events, we can highlight the speeches of Philip Lane from the ECB and Michelle Bowman from the Fed. However, these events have yet to be worked out by the market. Over the past one and a half to two weeks, we have seen more than one speech by an ECB official, and their overall opinion boils down to the fact that interest rates should not be raised further. This is "dovish" rhetoric unfavorable for the European currency, and Philip Lane himself has already voiced similar theses. Therefore, it is unlikely that he will announce that monetary policy tightening should continue today.

As for Michelle Bowman's speech will take place late at night, and there are currently no questions regarding the future actions of the Fed. The market expects another rate hike at the next meeting, partly pushing the dollar higher. Bowman's rhetoric is unlikely to change anything.

General conclusions:

There will be no significant events on Tuesday. Of course, this does not mean that both pairs will stand still with a 100% probability. However, the likelihood of a flat movement today will again be high.

Key trading system rules:

The strength of the signal is determined by the time it takes to form the signal (bounce or level breakthrough). The shorter the time required, the stronger the signal.

If two or more trades based on false signals were opened near a certain level, all subsequent signals from that level should be ignored.

During a flat market, any currency pair can generate numerous false signals or not generate them at all. In any case, stopping trading at the first signs of a flat market is better.

Trading positions are opened between the start of the European session and the middle of the American session, with all trades manually closed by then.

On the 30-minute timeframe, trading based on MACD indicator signals should only be done when there is good volatility and a trendline or channel validates a confirmed trend.

If two levels are located too close to each other (within 5 to 15 pips), they should be considered as a support or resistance zone.

What's on the charts:

Support and resistance levels - levels that serve as targets for opening buy or sell positions. Take Profit levels can be placed near them.

Red lines - channels or trendlines that display the current trend and indicate the preferred direction for trading.

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

Important speeches and reports (always found in the news calendar) can significantly impact the movement of currency pairs. Therefore, it's advisable to trade cautiously during their release or exit the market to avoid sharp price reversals against the previous trend.

Beginner forex traders should remember that only some trades will be profitable. Developing a clear strategy and practicing proper money management is key to success in trading over the long term.

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*Disclaimer: The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.