18.09.202406:12 Forex Analysis & Reviews: What to Pay Attention to on September 18? An Overview of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

A few macroeconomic events are scheduled for Wednesday, and none are significant. In the Eurozone, the inflation report for August will be released as the second estimate. Final estimates rarely differ from the first, so no considerable market reaction is expected from this report. In the U.S., reports on new home sales and building permits will be published. These are relatively minor reports, unlikely to trigger a reaction of more than 20-30 pips. Therefore, until the Federal Reserve meeting, the market may remain in a flat state. Everyone is waiting for the U.S. central bank's decision on the key interest rate.

Analysis of Fundamental Events:

There is only one significant fundamental event scheduled for Wednesday. In the evening, the Fed will announce the results of its historic meeting. There is a 99% probability that the key rate will be lowered, but it is still unclear by how many basis points. In our opinion, the market has already priced in a rate cut of even 0.5%, but if this scenario is realized, the dollar could fall further, as this is the most dovish of all possible options. A 0.25% cut is more likely, but the market has already priced that in. Therefore, after such a decision, the dollar may even strengthen. Jerome Powell's rhetoric at the press conference and the dot-plot chart, which will show the expectations of Fed committee members regarding future rates, will also play a significant role.

General Conclusions:

On Wednesday, both currency pairs could move in either direction. We are likely to see relatively sluggish movements throughout the day, but in the evening, there could be an "explosion" in either direction. The market has already been pricing in a 0.25% rate cut by selling the dollar, but a 0.5% rate cut could trigger a new collapse in the U.S. currency.

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.