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27.09.2023 05:05 AM
Key events on September 27: fundamental analysis for beginners

Analysis of macroeconomic reports:

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There are hardly any macroeconomic events on Wednesday. No important events scheduled in Germany, the European Union, and the United Kingdom. The United States will release a report on durable goods orders. This report is important because this category of goods is expensive and carries significant weight in household expenditures, reflecting people's inclination toward saving or spending at the current time. It is considered good for the economy if this indicator rises. However, do we really need a reaction to this report? Both the euro and the pound continue to fall almost every day. The dollar clearly doesn't need macroeconomic support at the moment, and it's unlikely that a single report can stop its upward movement.

Analysis of fundamental events:

There is absolutely nothing noteworthy among the fundamental events on Wednesday. Several European Central Bank officials will speak, but they have become quite repetitive and uninformative because we hear the same things day after day or nothing at all. Moreover, the speakers are not even the most important members of the monetary committee. In the United States, there are no speeches or other important events at all.

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General conclusion:

There are hardly any important events on Wednesday. Although, this does not mean that both pairs will stand still. The first two days of the week have shown us that, on the contrary, the downward movement will persist. It will just be gradual and low in volatility.

Basic rules of a trading system:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.

Paolo Greco,
Analytical expert of InstaForex
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