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03.10.202407:09 Forex Analysis & Reviews: What to Pay Attention to on October 3? An Overview of Fundamental Events for Beginners

Relevancia 01:00 2024-10-04 UTC--4
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Analysis of Macroeconomic Reports:

Exchange Rates 03.10.2024 analysis

There are only a few macroeconomic events scheduled for Thursday. Second estimates of the services sector's business activity indices for September will be released in Germany, the EU, the UK, and the US. However, second estimates rarely differ significantly from the first ones, so we don't expect a strong market reaction to this data. The crucial report is the ISM Services Index in the US. It has grown over the past two months, so a new positive reading could help the dollar continue its long-awaited strengthening. There is also the US jobless claims report, which is unlikely to impact market sentiment strongly.

Analysis of Fundamental Events:

Exchange Rates 03.10.2024 analysis

One of the key events on Thursday will be a speech by Raphael Bostic from the Federal Reserve. Earlier this week, Jerome Powell stated that the Fed does not plan to lower rates by 0.5% in November, which disappointed dollar sellers significantly. However, Powell won't be making the rate decision alone. The more Fed officials lean toward aggressive easing at the next meeting, the higher the chances of a renewed dollar decline. That said, we would only draw conclusions after the release of the unemployment and NonFarm Payrolls reports.

General Conclusions:

During the penultimate trading day of the week, the euro and the pound may continue to decline, though it likely won't be significant. We believe that a prolonged downward trend may be starting now. If Friday's key labor market and unemployment reports do not disappoint, the dollar may continue strengthening, as its recent declines have already caused considerable puzzlement.

Basic Rules of the Trading System:

1) Signal Strength: The strength of a signal is determined by the time it takes to form (bounce or break through a level). The less time it takes, the stronger the signal.

2) False Signals: If two or more trades are opened near a certain level based on false signals, all subsequent signals from that level should be ignored.

3) Flat Market: In a flat market, any pair can generate numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trading Timeframe: Trades should be opened between the start of the European session and the middle of the American session, after which they should be closed manually.

5) MACD Indicator Signals: In the hourly time frame, it is preferable to trade based on MACD signals only when there is good volatility and a trend confirmed by a trendline or trend channel.

6) Close Levels: If two levels are located too close to each other (between 5 and 20 pips), they should be considered as a single support or resistance area.

7) Stop Loss: Once the price moves 15-20 pips in the intended direction, a Stop Loss should be set at the breakeven point.

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 an auxiliary 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.

Desarrollado por un Paolo Greco
experto de análisis de InstaForex
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