Key events on November 2: fundamental analysis for beginners
November 2, 2023 4:23 am
Analysis of macroeconomic reports:
There will be few macroeconomic events on Thursday, and none of them are crucial. might pay attention to the Manufacturing PMIs in the European Union and Germany, but these will be the final estimates, which usually do not differ significantly from the initial ones. Moreover, both PMIs are well below the 50.0 level, so there is no chance that they will suddenly rise by 4-5 points. In the United States, there’s the report on initial jobless claims, which also rarely deviates from forecasts and, accordingly, rarely provokes a market reaction.
Analysis of fundamental events:
From Thursday’s fundamental events, market participants will keep an eye on the Bank of England meeting, but if its results are similar to the Fed’s meeting, traders should not expect much. Markets were pricing in a 90% chance that the key interest rate will remain unchanged, so the only hope is on the accompanying statement. If it carries a hawkish tone, the pound may receive the long-awaited support. However, unfortunately for the pound, there is a higher likelihood of a dovish stance from the central bank. We cannot predict the market’s reaction, but we caution that there could be high volatility and sharp price reversals.
General conclusion:
On Thursday, only one key event is expected, which is the BoE meeting. However, there is a very high chance that no resonant decisions will be made, and even the rate decision may not impress the market. Therefore, movements and volatility are possible but not very likely.
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.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of macroeconomic reports:
There will be few macroeconomic events on Thursday, and none of them are crucial. might pay attention to the Manufacturing PMIs in the European Union and Germany, but these will be the final estimates, which usually do not differ significantly from the initial ones. Moreover, both PMIs are well below the 50.0 level, so there is no chance that they will suddenly rise by 4-5 points. In the United States, there’s the report on initial jobless claims, which also rarely deviates from forecasts and, accordingly, rarely provokes a market reaction.
Analysis of fundamental events:
From Thursday’s fundamental events, market participants will keep an eye on the Bank of England meeting, but if its results are similar to the Fed’s meeting, traders should not expect much. Markets were pricing in a 90% chance that the key interest rate will remain unchanged, so the only hope is on the accompanying statement. If it carries a hawkish tone, the pound may receive the long-awaited support. However, unfortunately for the pound, there is a higher likelihood of a dovish stance from the central bank. We cannot predict the market’s reaction, but we caution that there could be high volatility and sharp price reversals.
General conclusion:
On Thursday, only one key event is expected, which is the BoE meeting. However, there is a very high chance that no resonant decisions will be made, and even the rate decision may not impress the market. Therefore, movements and volatility are possible but not very likely.
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.
The material has been provided by InstaForex Company – www.instaforex.com
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