FX.co ★ What to pay attention to on May 17? A breakdown of fundamental events

Analysis of macro data:

There won't be much macro data on Wednesday. In the eurozone, an inflation report for April will be published. However, don't be misled since it's just a second estimate of the indicator and the market is already prepared to see a value of 7%. A deviation from the forecast is possible, but it is unlikely to be strong, if it occurs at all. And the absence of a deviation will mean that there is nothing for the market to react to.

Meanwhile, a report of secondary importance on the number of building permits will be published in America, which can provoke a reaction of about 10-20 points, which, of course, traders are unlikely to be interested in. Therefore, I believe that there's almost nothing to pay attention to on Wednesday. I expect the euro to fall.

Fundamental events:

There will also be very few fundamental events on Wednesday. The only thing to take note of is a speech by Bank of England Governor Andrew Bailey, who rarely speaks and rarely makes important and loud statements. Therefore, we do not expect resonant rhetoric from him. And without it, it's hard to expect a market reaction. Late in the evening, a speech by European Central Bank Vice-President Luis de Guindos, but several representatives of the monetary committee of the ECB have already spoken this week. And we didn't hear anything that was particularly important. There is now a split of opinion in the ECB. Some officials believe that the rate needs to be increased as long as possible. Some believe that the time is approaching to end the tightening cycle. De Guindos himself holds the second position and it is unlikely to have changed in the past few days since his last speech. Therefore, the euro is unlikely to wait for support. And in any case, his speech is scheduled for late in the evening when novice traders should already leave the market.

General conclusions:

On Wednesday, the event calendar contains several interesting entries, but each of them has no more than a 20% chance of provoking a market reaction. I would still advise you to pay attention to the eurozone inflation report, as theoretically a "surprise" is possible. If there are no "surprises", then volatility will remain low, and there may be no trend-driven movement.

Basic rules of the trading system:

1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.

2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.

3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.

4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.

5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.

6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.

On the chart:

Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.

Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.

The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).

Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.

Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.