05.11.202408:20 Forex Analysis & Reviews: What to Watch on November 5? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are very few macroeconomic events scheduled for Tuesday. The only notable report is the ISM Services PMI from the U.S. This is indeed critical. The Manufacturing PMI has disappointed again, so the services sector may help offset some negative impacts. If the services index is weak today, the U.S. dollar could continue to decline.

Analysis of Fundamental Events:

Among the fundamental events on Tuesday is European Central Bank President Christine Lagarde's speech. Lagarde rarely makes bold statements, but this time, she may comment on the recent inflation report, which was stronger than expected. This potentially means the ECB's stance could become slightly more hawkish, favoring the euro. However, it's worth noting that the market has already priced in the Federal Reserve's monetary easing, so EUR/USD will likely remain balanced as it also factors in potential easing in the Eurozone.

General Conclusions:

On the second trading day of the week, macroeconomic and fundamental factors may again influence the movements of both currency pairs. This week could be pretty tense and volatile, so paying close attention to all events scheduled over the next four days is essential. The U.S. presidential elections, the Fed meeting, and the Bank of England meeting are among these events. Market movements may be erratic and unpredictable.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 15-20 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

MACD Indicator (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used as a source of signals.

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term trading.