Key events on April 11: fundamental analysis for beginners
April 11, 2024 7:23 am
Analysis of macroeconomic reports:
There are fewer macroeconomic events on Thursday, and none of them are crucial. Nevertheless, the US will release reports on unemployment claims and producer prices. We believe that after yesterday’s inflation report, the Producer Price Index is no longer crucial. Therefore, both reports, to be published during the European Central Bank meeting, will have no impact on the movement of both currency pairs.
Analysis of fundamental events:
There will be many fundamental events, and among them, some will be significant. Obviously, we will start with the ECB meeting. While the ECB may not lower key rates (although this is still possible), it may significantly soften its rhetoric. In other words, ECB President Christine Lagarde may announce that inflation in the EU has decreased enough to start easing monetary policy in June. If the Bank announces something like this then the euro may fall further. And we expect the single currency to continue the downward movement regardless. If the ECB lowers rates today, then the euro may collapse.
We will also highlight the speeches by Federal Reserve officials Williams, Collins, and Bostic. They will be the first officials to comment on the latest inflation report. The harsher their comments, the stronger the US dollar may strengthen.
General conclusion:
Today, market participants will focus on the ECB meeting and Lagarde’s speech. We believe that the Bank will either announce a decision to lower rates, or Lagarde will suggest that the Bank is ready to trim rates at the next meeting. Both scenarios could trigger a new decline in the euro. Meanwhile, the GBP/USD pair’s movement will depend on the sideways channel and the level of 1.2502.
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, after 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 trendline 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.
Beginners 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.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of macroeconomic reports:
There are fewer macroeconomic events on Thursday, and none of them are crucial. Nevertheless, the US will release reports on unemployment claims and producer prices. We believe that after yesterday’s inflation report, the Producer Price Index is no longer crucial. Therefore, both reports, to be published during the European Central Bank meeting, will have no impact on the movement of both currency pairs.
Analysis of fundamental events:
There will be many fundamental events, and among them, some will be significant. Obviously, we will start with the ECB meeting. While the ECB may not lower key rates (although this is still possible), it may significantly soften its rhetoric. In other words, ECB President Christine Lagarde may announce that inflation in the EU has decreased enough to start easing monetary policy in June. If the Bank announces something like this then the euro may fall further. And we expect the single currency to continue the downward movement regardless. If the ECB lowers rates today, then the euro may collapse.
We will also highlight the speeches by Federal Reserve officials Williams, Collins, and Bostic. They will be the first officials to comment on the latest inflation report. The harsher their comments, the stronger the US dollar may strengthen.
General conclusion:
Today, market participants will focus on the ECB meeting and Lagarde’s speech. We believe that the Bank will either announce a decision to lower rates, or Lagarde will suggest that the Bank is ready to trim rates at the next meeting. Both scenarios could trigger a new decline in the euro. Meanwhile, the GBP/USD pair’s movement will depend on the sideways channel and the level of 1.2502.
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, after 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 trendline 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.
Beginners 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.
The material has been provided by InstaForex Company – www.instaforex.com
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