Analysis of macro data:
There will be plenty of macro data on Friday. This whole week has been quite saturated with fundamental and macroeconomic events, and we're even a bit surprised that the EUR/USD pair has shown such low volatility. In general, we only witnessed a noticeable movement yesterday, but let's go back to the last trading day of the week.
It will all start quite trivially. The European Union will release its retail sales report for March. The forecasts are very weak, but it could still surpass estimates. Thus, the euro may receive some support from the very beginning of the day. However, of course, the most important data will be published in the US in the second half of the day. Reports on unemployment, the labor market, and wages usually provoke a strong market reaction, but it is very difficult to predict how it will turn out this time. Despite yesterday's decline in the pair, the market remains quite bullish, so the euro could still rise today.
The number of nonfarm payrolls, according to forecasts, should decrease to 180-190,000. However, what is important is not how much they decrease, but how well the forecast is met. We believe that any value above 200,000 can be considered positive, but the market may think otherwise, as lately it has only been buying. The unemployment rate may rise to 3.6%, which we don't see as terrible, as the indicator still remains at its 50-year lows. But the market may again consider such a value negative.
Fundamental events:
There are absolutely no fundamental events to highlight on Friday. No important speeches are scheduled throughout the day. However, on Wednesday and Thursday, traders had many opportunities to actively trade based on the fundamental background. They took advantage of the opportunities by about 50%. Today, there will be more than enough macro data, which will be more important than the results of the Fed meeting.
General conclusions:
On Friday, there will be no fundamental background at all, and the macroeconomics will be very strong, but this will happen in the second half of the day. Please remember to be cautious, as even relatively strong data from the US may not lead to an increase in the dollar. The market is still focused on buying and often ignores positive data and events for the dollar. Also, there may be "swings" as the market is in a slightly agitated state after the results of the Fed and ECB meetings
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.
