Key events on February 12: fundamental analysis for beginners

The economic calendar is entirely empty on Monday. We can expect another dull Monday following a quite uneventful week. Both currency pairs did not show any notable movements, mainly due to the quiet fundamental and macroeconomic background. There were almost no significant reports. Several European Central Bank and Federal Reserve officials spoke, but they did not provide any new information to the market, which is shown by the significantly weak movements.

However, there will be several fundamental events on Monday. Although it's difficult to count on them if we want a strong market reaction. We already witnessed a number of speeches, but after the meetings of the ECB, Fed, and the Bank of England, it became quite difficult to expect new information after just a few days. Moving forward, the Chief Economist of the ECB, Philip Lane, and several of his colleagues will speak on Monday. We can also look forward to BoE Governor Andrew Bailey's speech, which is the most important event of the day. Fed officials Neil Kashkari and Michelle Bowman will also speak. Undoubtedly, their comments on monetary policy will be very interesting but unlikely to be crucial.

On Monday, both currency pairs may continue to exhibit confusing movements amid low volatility. Corrective movements for both pairs are already enough for us to expect that the downward movement may resume. However, volatility will likely remain low, and the macroeconomic and fundamental background will be weak as well. Therefore, it is difficult to expect strong, trending movements from both the euro and the pound. Nevertheless, it would be much easier for us to expect a decline than growth.

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, after 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 trendline 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.

Beginners 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.