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There are several macroeconomic events scheduled for Tuesday, but Monday has already shown us that the market is ready to ignore economic reports. For instance, yesterday, the market ignored the US ISM index because it was too busy reacting to the results of the first round of parliamentary elections in France. Today, we have an important Eurozone inflation report, which will determine whether the European Central Bank will decide to lower the key rate for the second time in September. We believe that the euro may drop if inflation falls below 2.5%. The question is whether this drop will be enough for the EUR/USD to break out of the horizontal channel. It is unlikely...
The US docket will feature an important JOLTs report on the number of job openings in May, but the market already ignored yesterday's ISM index, which is more important. For now, the EUR/USD pair is showing flat dynamics, and we see corresponding movements every day.
Among the fundamental events of Tuesday, we can highlight the speeches of ECB President Christine Lagarde and Federal Reserve Chair Jerome Powell. However, Lagarde also spoke on Monday, and she did not provide any significant information. The same can be observed today. Without new macro data, Powell can't provide important information as well. Furthermore, his stance has remained unchanged in recent weeks. Therefore, we do not expect any major statements from him either.
Today, there will be quite a few important events, but upon closer examination, they all have a low chance of provoking a strong market reaction. Inflation in the European Union is not as significant as it once was since the ECB has already begun easing monetary policy. It is difficult to expect any important statements from Lagarde and Powell. In addition, market participants may also ignore the JOLTs report. It seems that today we will also witness weak sideways movement from both currency pairs.
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.
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.
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