Analysis of macroeconomic reports:
The economic calendar is quiet on Monday. There won't even be any minor events throughout the day, so you can rely only on technical analysis when making decisions. However, volatility might be very low, as is often the case on Mondays, and in this situation, the macroeconomic background will be completely absent.
Analysis of fundamental events:
No fundamental events on Monday either. Therefore, there is nothing to focus on. We expect low volatility and sideways movement for both currency pairs. Nevertheless, we will still remind you that strong movements can still occur in the forex market even without corresponding news.
General conclusion:
On Monday, there are no fundamental or macroeconomic events scheduled in the United States, the European Union, or the United Kingdom. The calendar is basically empty. In case of rebounds from important levels or trendlines, we can expect a decline from both currency pairs, but take note that there's a much higher chance of seeing a low-volatility flat phase on Monday.
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, after 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 trendline 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.
Beginners 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.
