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26.05.2025 07:45 AM
What to Pay Attention to on May 26? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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No macroeconomic reports are scheduled for Monday. Therefore, the macroeconomic background will not influence the movement of either currency pair. In any case, macroeconomics currently means very little to traders. Last week, the dollar repeatedly fell without any valid reasons, often triggered by superficial factors or new sanction-related decisions from Trump.

Analysis of Fundamental Events:

Among Monday's fundamental events, European Central Bank President Christine Lagarde's speech is the only one worth noting. However, as mentioned before, central bank speeches currently have no impact on the market since the policy stance and direction of central banks are already fully understood, and the market is trading solely on the Trump factor. Even if Christine Lagarde were to announce the ECB's readiness to cut the key rate to zero, it would hardly affect anything.

We believe that the trade war remains the only factor that matters to the market—even though it's slowly de-escalating, it continues. Donald Trump keeps announcing the signing of trade agreements, but this information offers little support to the dollar. The dollar's decline may continue if Trump starts imposing new tariffs or raising existing ones or fails to finalize trade agreements with most countries—precisely what we saw last week.

The dollar may continue falling without new tariffs simply because the market's sentiment toward the U.S. President and his policies remains extremely negative.

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General Conclusions:

On the first trading day of the new week, both currency pairs may move in either direction. The uptrend remains intact for both pairs, while the dollar continues to fall for any reason — or even without one. A correction may occur on Monday, but the overall trend and market sentiment will remain unchanged. Trading should still be conducted based on key levels.

Key Rules for the Trading System:

  1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
  3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
  4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
  5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
  6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
  7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15–20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.

Paolo Greco,
Analytical expert of InstaForex
© 2007-2025
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