Key events on November 6: fundamental analysis for beginners

There are hardly any macroeconomic events on Monday, and none of them hold any importance. The final assessments of Services PMIs will be released in the European Union and Germany. These are secondary reports, and no significant changes are expected compared to the initial assessments. In the UK, the Construction PMI report for October will be released. These are all the economic events scheduled for Monday. As a result, we expect a downward correction following the significant growth on Friday.

Among the fundamental events on Monday, we can only highlight the speech of Huw Pill, the Chief Economist of the Bank of England. It is difficult for us to predict whether Pill can provide any positive surprises to the markets, especially after the BoE's meeting last week, which made it clear that the central bank has no plans to raise interest rates in the near future. However, his speech may influence the general sentiment of the GBP/USD pair.

Monday sees no important events and publications. We expect low volatility, and both currency pairs to start a downward retracement, which could mark the beginning of a new protracted decline.

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, post which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trend line or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginning traders should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.