Key events on September 29: fundamental analysis for beginners
September 29, 2023 4:23 am
Analysis of macroeconomic reports:
Quite a number of significant macroeconomic events on Friday than in all the previous days of the week combined. Let’s start with Germany. Traders can look to the release of retail sales for August in the European morning, as well as unemployment figures and unemployment benefit claims for September. We can’t say these are super important data, but they could still trigger a slight market reaction. The more unexpected the values of these reports are, the stronger the potential market reaction.
Next, in the UK, the GDP report for the second quarter will be published in the third estimate. Again, this is not the most important report, as the market often ignores such data, and the report itself rarely deviates from forecasts. Therefore, a reaction is possible, but it’s unlikely to be strong.
In the European Union, the main item on this week’s agenda is the inflation data for September. Like in the case of Germany, a significant slowdown in the growth of consumer prices is expected, down to 4.5% on an annual basis. It’s hard to predict how the euro will react to such a value. In theory, it should fall again, but the euro rose on a similar report in Germany. We believe that right now the technical need for a correction is more important than the macroeconomic backdrop.
In the US, market participants may keep an eye on reports on personal spending and income, the core personal consumption expenditure price index, and the University of Michigan’s consumer sentiment index. All of these reports are secondary of importance, and the market’s reaction to them is likely to be weak. However, there will be a large number of reports, so we can expect good movements on Friday.
Analysis of fundamental events:
From Friday’s fundamental events, only a speech by European Central bank President Christine Lagarde stands out. We are already familiar with the ECB’s position, so there’s no need for further clarification. We don’t expect Lagarde to surprise the markets with new information.
General conclusion:
On Friday, there are hardly any important events, but we can look forward to an overwhelming number of economic reports. Thus, Friday promises to be an interesting day, but, of course, the direction of movement can change multiple times during the day. So we can expect volatility to gradually increase.
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:
Quite a number of significant macroeconomic events on Friday than in all the previous days of the week combined. Let’s start with Germany. Traders can look to the release of retail sales for August in the European morning, as well as unemployment figures and unemployment benefit claims for September. We can’t say these are super important data, but they could still trigger a slight market reaction. The more unexpected the values of these reports are, the stronger the potential market reaction.
Next, in the UK, the GDP report for the second quarter will be published in the third estimate. Again, this is not the most important report, as the market often ignores such data, and the report itself rarely deviates from forecasts. Therefore, a reaction is possible, but it’s unlikely to be strong.
In the European Union, the main item on this week’s agenda is the inflation data for September. Like in the case of Germany, a significant slowdown in the growth of consumer prices is expected, down to 4.5% on an annual basis. It’s hard to predict how the euro will react to such a value. In theory, it should fall again, but the euro rose on a similar report in Germany. We believe that right now the technical need for a correction is more important than the macroeconomic backdrop.
In the US, market participants may keep an eye on reports on personal spending and income, the core personal consumption expenditure price index, and the University of Michigan’s consumer sentiment index. All of these reports are secondary of importance, and the market’s reaction to them is likely to be weak. However, there will be a large number of reports, so we can expect good movements on Friday.
Analysis of fundamental events:
From Friday’s fundamental events, only a speech by European Central bank President Christine Lagarde stands out. We are already familiar with the ECB’s position, so there’s no need for further clarification. We don’t expect Lagarde to surprise the markets with new information.
General conclusion:
On Friday, there are hardly any important events, but we can look forward to an overwhelming number of economic reports. Thus, Friday promises to be an interesting day, but, of course, the direction of movement can change multiple times during the day. So we can expect volatility to gradually increase.
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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