What to pay attention to on May 1? A breakdown of fundamental events
May 1, 2023 5:23 am
Analysis of macroeconomic reports::
On Monday, the United Kingdom, European Union, and the United States will release a total of two reports. Both are US manufacturing indexes for April. According to S&P, business activity will rise to 50.4 points and leave the “red zone” below the 50 level. According to ISM, business activity will rise slightly to 46.5-46.7 points and, accordingly, remain below the “waterline” of 50. As always, the market reaction will depend on how closely the actual values match the forecasted ones and what the deviation will be. However, the ISM index is considered important, so the reaction to it could be significant. Nonetheless, this data is unlikely to have much impact on the overall picture of the situation. In the medium term, the euro will continue to move either up or sideways.
Fundamental events:
There is absolutely nothing to highlight in terms of fundamental events on Monday. Perhaps some sudden event will occur. For example, last week, Janet Yellen and Philip Lane gave speeches that were not initially on the event calendar. However, Monday may turn out to be quite boring, although the market now often presents surprises in the form of amazing movements.
General conclusions:
On Monday, there will be few macro data, and no fundamental events at all. The main movements of the day are expected during the US trading session, which traditionally turns out to be more volatile. In general, we do not expect sharp movements from the pair on Monday, nor do we expect strong dollar appreciation.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
On the chart:
Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.
The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
The material has been provided by InstaForex Company – www.instaforex.com
Analysis of macroeconomic reports::
On Monday, the United Kingdom, European Union, and the United States will release a total of two reports. Both are US manufacturing indexes for April. According to S&P, business activity will rise to 50.4 points and leave the “red zone” below the 50 level. According to ISM, business activity will rise slightly to 46.5-46.7 points and, accordingly, remain below the “waterline” of 50. As always, the market reaction will depend on how closely the actual values match the forecasted ones and what the deviation will be. However, the ISM index is considered important, so the reaction to it could be significant. Nonetheless, this data is unlikely to have much impact on the overall picture of the situation. In the medium term, the euro will continue to move either up or sideways.
Fundamental events:
There is absolutely nothing to highlight in terms of fundamental events on Monday. Perhaps some sudden event will occur. For example, last week, Janet Yellen and Philip Lane gave speeches that were not initially on the event calendar. However, Monday may turn out to be quite boring, although the market now often presents surprises in the form of amazing movements.
General conclusions:
On Monday, there will be few macro data, and no fundamental events at all. The main movements of the day are expected during the US trading session, which traditionally turns out to be more volatile. In general, we do not expect sharp movements from the pair on Monday, nor do we expect strong dollar appreciation.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
On the chart:
Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.
The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: