Analysis of Macroeconomic Reports:
Very few macroeconomic events are scheduled for Friday. We can only note the report on industrial production in the European Union and the University of Michigan consumer sentiment index in the United States. These reports are unlikely to provoke a strong market reaction, and yesterday showed us that the market is once again ready to sell the dollar even without reasons. Both currency pairs still maintain downward trends, but if we see growth without any justification today, it will likely mean that preparations are underway to resume the two-year upward trends in both the euro and the pound.
Overview of Fundamental Events:
Among the fundamental events on Friday, only European Central Bank President Christine Lagarde's speech is worth noting. Moreover, at the moment, it is not even known at what time it will take place. Yesterday, Lagarde did not convey anything significant to the market, yet it still actively bought the euro as if it were about tightening rather than easing monetary policy. However, the market has repeatedly interpreted the information received in 2024 as it wanted.
General Conclusions:
During the last trading day of the week, both currency pairs could continue to rise if the market disregards the macroeconomic and fundamental backdrop. At the same time, a decline would again be more logical and consistent. Today, novice traders will have to trade purely based on technical analysis. Only during the release of the two aforementioned reports should they switch to heightened vigilance, expecting a pullback or reversal.
Basic Rules of the Trading System:
1) The strength of a signal is determined by the time it takes for the signal to form (bounce or level breakthrough). The less time it took, the stronger the signal.
2) If two or more trades were opened around any level due to false signals, subsequent signals from that level should be ignored.
3) In a flat market, any currency pair can form multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.
4) Trades should be opened between the start of the European session and midway through the U.S. session. After this period, all trades must be closed manually.
5) In the hourly time frame, trades based on MACD signals are only advisable amidst good volatility and a trend confirmed by a trendline or trend channel.
6) If two levels are too close to each other (5 to 20 pips), they should be considered a support or resistance area.
7) After moving 15-20 pips in the intended direction, the Stop Loss should be set to break even.
What's on the Charts:
Support and Resistance price levels: targets for opening long or short positions. You can place Take Profit levels around them.
Red lines: channels or trend lines that depict the current trend and indicate the preferred trading direction.
The MACD indicator (14,22,3): encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.
Important speeches and reports (always noted in the news calendar) can profoundly influence the movement of a currency pair. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to avoid sharp price reversals against the prevailing movement.
For beginners, it's important to remember that not every trade will yield profit. Developing a clear strategy and effective money management is key to success in trading over the long term.
