16.10.202408:00 Forex Analysis & Reviews: What to Pay Attention to on October 16? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are a few macroeconomic events scheduled for Wednesday. The main highlight is the inflation report from the UK, which will be released in just 15 minutes. This report will influence the Bank of England's decision at its upcoming meeting. Recall that the BoE has hesitated to lower its key interest rate, as it expects inflation to rise in the year's second half. If the concerns of the British central bank are not confirmed, the rate could be lowered for the second time at the upcoming meeting. In this case, the British pound, which has been ignoring negative fundamental and macroeconomic factors for the past two years, may continue its decline.

Analysis of Fundamental Events:

The only noteworthy fundamental event on Wednesday is the speech by European Central Bank President Christine Lagarde. However, tomorrow's ECB meeting will announce decisions on key interest rates, followed by another speech from the head of the central bank. Therefore, Lagarde will likely make important statements tomorrow, which could affect the euro both in the short and long term.

General Conclusions:

On the third trading day of the week, the euro may continue its downward movement, while the dynamics of the pound will depend on the UK inflation report. Today, the pound could resume its decline after a week and a half of flat movement, or it could show decent growth, marking the beginning of a correction. However, we expect both currency pairs to continue falling in the medium term.

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 break through the level). The less time it takes, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. In any case, at the first signs of a flat market, it is better to stop trading.
4. Trading positions should be opened during the period from the start of the European session until the middle of the US session, after which all trades should be closed manually.
5. In the hourly time frame, it is recommended to trade based on MACD indicator signals only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (between 5 to 20 pips), they should be considered as a support or resistance zone.
7. Upon passing 15-20 pips in the intended direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Support and Resistance Price Levels: These levels serve as targets when opening buy or sell positions. They can also be used as points to set Take Profit levels.

Red Lines: These represent channels or trend lines that display the current trend and indicate the preferred trading direction.

MACD Indicator (14,22,3): The histogram and signal line serve as a supplementary indicator that can also be used as a source of trading signals.

Important Speeches and Reports (always found in the news calendar) can significantly impact the movement of a currency pair. Therefore, trading should be done with maximum caution during their release, or you may choose to exit the market to avoid a sharp price reversal against the preceding movement.

For Beginners Trading on the Forex Market: It's essential to remember that not every trade will be profitable. Developing a clear strategy and practicing money management is key to achieving long-term success in trading.