Key events on April 4: fundamental analysis for beginners

There are few macroeconomic events on Thursday, and none of them are crucial. We had fairly high hopes for this week. It started quite well – the dollar rose on Monday due to a strong ISM manufacturing PMI in the US. But then there were days when market movements and reactions to the macroeconomic background were illogical. Today, novice traders can only pay attention to absolutely minor reports on EU PMI data and initial jobless claims in the US. Obviously, these reports will not affect the movement of both currency pairs.

There are a total of five fundamental events scheduled for Thursday. Five members of the Federal Reserve's monetary committee will speak, but all of them will take place late in the evening or even at night. Therefore, their statements will not influence the dollar during the day. You may focus on the speeches of Thomas Barkin, Lael Brainard, and Loretta Mester. However, recently there have been enough speeches by Fed representatives, and even Jerome Powell spoke earlier this week. The market is leaning towards a higher number of rate cuts in 2024 (three), but this can't be considered as dovish information, as the market was initially expecting 5-6 steps of 0.25% cuts.

Today, there will be few important macroeconomic and fundamental events. We expect low volatility, and after two days of growth for the euro and the pound, it might be time for a small bearish correction.

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.