Key events on February 21: fundamental analysis for beginners

For Wednesday, the lineup of macroeconomic events is practically barren, and none of them are crucial. There won't even be secondary reports, so you can rely on technical analysis when making trading decisions. On Tuesday, the volatility of both pairs was quite good, but it's important to keep in mind that Bank of England Governor Andrew Bailey delivered a speech. Although the market reacted somewhat strangely (from our perspective), the market still had a reason to trade more actively on Tuesday. There won't be such reasons on Wednesday.

The day will be packed with fundamental events, but all of them are of a secondary nature. In the US, representatives of the Federal Reserve's monetary committee, Raphael Bostic and Michelle Bowman, will speak. They can share interesting information with the market, but even without that, it is clear that the market's dovish expectations regarding the Fed's monetary policy are cooling off. In the UK, BoE policymaker Swati Dhingra will speak, but we shouldn't expect much after Bailey's speech. In the evening, the FOMC minutes is more of a formality than an important report. In any case, this will not have any significant impact on the pairs' movements during the day.

Wednesday sees no important events. We have several secondary speeches by representatives of various central banks, which we have the honor to observe every day, the absence of important reports, and the minutes of the last Fed meeting. Therefore, it's going to be another day of low volatility, and trading will have to be based on technicals.

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.