Analysis of macroeconomic reports:
For Thursday, the lineup of macroeconomic events is practically barren, and none of them hold any importance. Hypothetically, beginners might pay attention to the industrial production report in Germany, the eurozone GDP report, and the US unemployment claims data. So let's take a closer look at each of these reports.
The German industrial production report is hardly important as it pertains to just one country in the eurozone. The GDP report for the euro area may sound ominous, but in reality, the market rarely reacts to such reports. The recent US GDP report was resonant but failed to elicit any market response. The last report of the day is the unemployment claims report, which has the potential to impact the dollar's value only in the event of a significant deviation from forecasts.
Analysis of fundamental events:
There won't be any fundamental events on Thursday. As we have discussed, fundamental events currently have almost no impact on the dollar, euro, or pound. Central bank representatives have not shared any new or useful information with the market for a very long time. Therefore, their speeches go unnoticed. Moreover, they don't even influence the overall fundamental background, as none of the three central banks we regularly discuss is ready to raise or lower interest rates in the near future.
General conclusion:
There are no significant events on Thursday. Market participants are already focused on Friday, which is when the NonFarm Payrolls and unemployment reports will be released in the United States. Therefore, we expect a steady decline in both currency pairs regardless of the outcomes of the aforementioned reports.
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.
