FX.co ★ What events may affect market sentiment on July 21? Overview of fundamental events for beginners

Overview of macroeconomic reports

On Friday, there are no significant reports lined up for the EU and the US. On the other hand, the UK will release its retail sales report for June, which carries some weight in the eyes of traders, but it is unlikely to affect the current trend. Take note that there's a high probability that we are now observing a downtrend, and market participants are now focused on taking profits from long positions and opening short positions. Therefore, even if the report turns out to be strong, it is unlikely to change the market sentiment to bullish. In addition, the EUR/USD pair will likely have nothing significant to react to throughout the day.

Overview of fundamental events

There is absolutely nothing noteworthy about today's fundamental events. Next week, the main events will be the meetings of both the Federal Reserve and the European Central Bank, so now both central banks are observing a "blackout period". This means that members of the monetary committees are prohibited from giving comments on monetary policy. As a result, there won't be any speeches or comments from them until the central bank meetings. The day could portray a static and boring market, although the pound might try to extend its downward movement.

Bottom line

There are no significant fundamental events or reports. The only notable report is the UK retail sales, but it may only impact currency pairs if the latest numbers significantly deviate from forecasts. Otherwise, no significant reactions should follow.

Main rules of the trading system:

• The strength of the signal is calculated by the time it took to form the signal (bounce/drop or overcoming the level). The less time it took, the stronger the signal.
• If two or more trades were opened near a certain level due to false signals, all subsequent signals from this level should be ignored.
• In a flat market, any currency pair can generate a lot of false signals or not generate them at all. But in any case, as soon as the first signs of a flat market are detected, it is better to stop trading.
• Trades are opened in the time interval between the beginning of the European session and the middle of the American one when all trades must be closed manually.
• On the 30-minute timeframe, you can trade based on MACD signals only on the condition of good volatility and provided that a trend is confirmed by the trend line or a trend channel.
• If two levels are located too close to each other (from 5 to 15 points), they should be considered as an area of support or resistance.

Comments on charts

Support and resistance levels are levels that serve as targets when opening long or short positions. Take Profit orders can be placed around them.

Red lines are channels or trend lines that display the current trend and show which direction is preferable for trading now.

The MACD (14,22,3) indicator, both histogram and signal line, is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always found in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it is recommended to trade with utmost caution or to exit the market to avoid a sharp price reversal against the previous movement.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and money management is the key to success in trading over a long period of time.