06.11.202408:17 Forex Analysis & Reviews: What to Watch on November 6? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

No macroeconomic events are scheduled for Wednesday, but they aren't particularly needed at the moment. Overnight, both major currency pairs covered a 200-pip range within a few hours due to the U.S. elections. As a result, the market may continue to experience volatility in either direction throughout the day. Predicting election outcomes is impossible, as is anticipating how results will shift over time. Therefore, we won't attempt to forecast potential movements for the rest of the week. The dollar remains in a leading position as the global trend is downward. Tomorrow's Bank of England and Federal Reserve meetings could spark additional market fluctuations.

Analysis of Fundamental Events:

Among Wednesday's fundamental events is a speech by European Central Bank President Christine Lagarde. While Lagarde rarely makes headline-grabbing statements, she may comment on the latest inflation report, which exceeded forecasts. However, the market is not focused on Christine Lagarde, the ECB, or its monetary policy. Until the end of the week, movements will depend entirely on the U.S. election results and the outcomes of the Fed and BoE meetings.

General Conclusions:

On the third trading day of the week, both currency pairs may fluctuate sharply in either direction. The overnight rise in the U.S. dollar should not be misleading, as it doesn't provide a basis for any conclusions. The dollar could just as easily decline if, for example, Kamala Harris takes the lead or if the Fed adopts a dovish stance tomorrow. Therefore, caution is advised when opening any trading positions.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 15-20 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.