07.01.202508:15 Forex Analysis & Reviews: What to Pay Attention to on January 7? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Tuesday's schedule is filled with important macroeconomic events, nearly all of which are significant. The primary focus will be on the Eurozone's inflation data for December. Similar to Germany's inflation report from yesterday, this data may indicate stronger growth than expected. If that happens, the euro could receive additional support, as rising inflation would suggest that the European Central Bank (ECB) may take a more cautious approach to easing monetary policy. While the Eurozone unemployment rate is noteworthy, it will be of secondary importance.

In the U.S., key reports include the ISM Services PMI and the JOLTs Job Openings report. It's important to note that the JOLTs report is published with a two-month lag. While this report is significant, it does not reflect current trends but rather conditions from two months prior. As a result, the ISM index holds greater weight in the analysis.

Analysis of Fundamental Events:

There are no significant fundamental events scheduled for Tuesday. Currently, the market continues to function without any need for additional speeches or commentary from central bank officials regarding monetary policy, as all essential information has already been provided. Recent meetings of the central banks have offered comprehensive updates on the economic outlook and future policy actions. However, any further increase in Eurozone inflation may prompt additional comments from European Central Bank (ECB) representatives.

General Conclusions:

On the second trading day of the week, traders can expect ongoing upward corrections in both currency pairs. There will be enough potential drivers to support the growth of both the euro and the pound. While we do not anticipate strong growth for the euro and pound in the short term, some upward movement is likely to occur today.

Key Rules for the Trading System:

1. Signal strength is determined by the time it takes for a signal to form (bounce or breakout of a level). The shorter the time, the stronger the signal.
2. If two or more false signals are generated near a level, subsequent signals from that level should be ignored.
3. In a flat market, any pair may produce numerous false signals or none at all. In such cases, it's better to stop trading at the first signs of consolidation.
4. Trades should be opened during the European session through the middle of the American session. All trades should be manually closed thereafter.
5. On the hourly timeframe, trades based on MACD signals should only be executed during periods of strong volatility and trends confirmed by trendlines or trend channels.
6. If two levels are very close (5–20 pips apart), they should be treated as a support or resistance zone.
7. After a 15–20 pip movement in the correct direction, set a Stop Loss at breakeven.

What's on the Charts:

Support and Resistance Levels: Targets for opening buy or sell orders. These are ideal points for setting Take Profit levels.

Red Lines: Trendlines or channels reflecting the current trend direction and indicating the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line serving as auxiliary indicators and sources of signals.

Key News Events and Reports: Always listed in the economic calendar, these can significantly impact currency pair movements. Exercise caution or exit the market during such events to avoid sharp price reversals.

Every trade cannot be profitable. The key to long-term success in Forex trading lies in developing a clear strategy and effective money management.