Key events on September 28: fundamental analysis for beginners
September 28, 2023 4:26 am
Analysis of macroeconomic reports:
For Thursday, the lineup of macroeconomic events is quite uneventful. Germany will release its inflation report for September, the European Union will publish a whole series of secondary reports that will hardly attract market interest, and traders can look to the release of the US weekly Jobless Claims report and the third revision of US GDP. We believe that none of these reports can be considered important. Let’s see why.
Let’s start with inflation in Germany. A few months ago, this indicator determined how much and for how long the European Central Bank would raise rates. But this is no longer the case. After more than half of the ECB’s monetary committee members indicated that tightening is only possible in the event of a sharp rise in inflation, there is no longer a correlation between rates and inflation. In Germany, inflation is expected to fall to 4.6%, which will definitely not support the euro.
The US GDP report. This report could only trigger a strong reaction if its figures significantly deviate from forecasts. Occasionally, GDP forecasts turn out to be inaccurate. However, this is rare. US reports are important and interesting, however, this report has a low chance of provoking a significant market reaction.
Analysis of fundamental events:
From Thursday’s fundamental events, only a speech by Federal Reserve Chair Jerome Powell stands out, but it will take place late at night, so this won’t have any impact on the movement of both pairs during the day. Several representatives of the ECB’s monetary committee will also deliver speeches, but there will be no immediate market reaction to these events, and officials will not provide any new information to the market. Traders are already well aware of the ECB’s position.
General conclusion:
There will be few important events on Thursday. We can highlight one report in Germany and two in the United States, but the market may ignore them. They certainly will not be able to reverse the downtrends. Corrections will start when the market becomes saturated with selling pressure.
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:
For Thursday, the lineup of macroeconomic events is quite uneventful. Germany will release its inflation report for September, the European Union will publish a whole series of secondary reports that will hardly attract market interest, and traders can look to the release of the US weekly Jobless Claims report and the third revision of US GDP. We believe that none of these reports can be considered important. Let’s see why.
Let’s start with inflation in Germany. A few months ago, this indicator determined how much and for how long the European Central Bank would raise rates. But this is no longer the case. After more than half of the ECB’s monetary committee members indicated that tightening is only possible in the event of a sharp rise in inflation, there is no longer a correlation between rates and inflation. In Germany, inflation is expected to fall to 4.6%, which will definitely not support the euro.
The US GDP report. This report could only trigger a strong reaction if its figures significantly deviate from forecasts. Occasionally, GDP forecasts turn out to be inaccurate. However, this is rare. US reports are important and interesting, however, this report has a low chance of provoking a significant market reaction.
Analysis of fundamental events:
From Thursday’s fundamental events, only a speech by Federal Reserve Chair Jerome Powell stands out, but it will take place late at night, so this won’t have any impact on the movement of both pairs during the day. Several representatives of the ECB’s monetary committee will also deliver speeches, but there will be no immediate market reaction to these events, and officials will not provide any new information to the market. Traders are already well aware of the ECB’s position.
General conclusion:
There will be few important events on Thursday. We can highlight one report in Germany and two in the United States, but the market may ignore them. They certainly will not be able to reverse the downtrends. Corrections will start when the market becomes saturated with selling pressure.
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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