16.12.202408:23 Forex Analysis & Reviews: What to Look Out for on December 16? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Many macroeconomic events are scheduled for Monday, primarily the release of PMI indices for the services and manufacturing sectors in Germany, the EU, the US, and the UK. Given the current economic decline, it is difficult to expect positive values from European and British indices. However, a positive deviation from forecasts could strengthen the euro and the pound. The same applies to the US indices, although they are secondary in importance compared to the ISM activity indices, which carry greater weight for the market. It is unlikely that the euro will break out of its horizontal channel today or that the pound will extend its decline.

Analysis of Fundamental Events:

The key fundamental event on Monday is the speech by Christine Lagarde, President of the European Central Bank. However, it is worth noting that the ECB's meeting was held just last week, and any information Lagarde wanted to convey has likely already been shared. It is unlikely that her stance has changed significantly over the past few days. In both the US and the UK, the "quiet period" is in effect, as the Bank of England and the Federal Reserve are set to hold their final meetings of the year later this week.

General Conclusions:

The first trading day of the new week will feature several noteworthy events, as will the entire week ahead. The market may continue selling the euro and the pound in line with the medium-term trend. However, a correction is more likely today. It is important to remember that any significant deviation from the PMI forecasts could trigger a strong market reaction, with the direction depending on the nature of the deviation.

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.