Key events on November 23: fundamental analysis for beginners

Analysis of macroeconomic reports:

For Thursday, there will be a total of nine macroeconomic events. PMIs will be published in Germany, the United Kingdom, and the European Union. We are interested in composite indices, and indices for the services and manufacturing sectors are particularly important. Therefore, beginners should pay attention to six reports, all of which will be published in the morning. According to forecasts, all six PMIs for November are expected to fall again. If the forecasts are confirmed, the euro and the pound may come under pressure once again. There are no interesting reports in the US.

Analysis of fundamental events:

No fundamental events planned for Thursday, so traders can focus on the PMIs. Traders might be more active during the US session rather than the European session. Both pairs are currently inclined towards a bearish correction.

General conclusion:

On Thursday, we can only highlight the PMIs. We believe that both pairs will continue to decline towards trendlines, even if the reports are not in favor of the US dollar. All six PMIs (or the majority of them) would need to be very strong for the euro and the pound to resume their upward movement.

Basic rules of a trading system:

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.

How to read charts:

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.