FX.co ★ Key events on November 15: fundamental analysis for beginners

Analysis of macroeconomic reports:

There will be few macroeconomic events on Wednesday, but some of them are important. We should start with the UK inflation data for October. If we consider the sharp movement that was triggered by the US inflation data, one might even expect something similar from British inflation. However, we don't think this will happen for the second time. The dollar's decline appears totally inadequate and the market reaction was quite excessive. Moving forward, the eurozone will release an industrial production report, which is of secondary importance. And lastly, the US will release data on retail sales and producer prices. These reports may trigger a market reaction, but it is unlikely to be strong. On Wednesday, we will find out whether the previous day's movement was purely accidental. If we witness a sharp downward movement, then the market will simply repay its debt to the dollar.

Analysis of fundamental events:

There are few fundamental events planned for Wednesday, and as we remember, they currently do not have an immediate impact on the movement of instruments. Federal Reserve officials Barr and Barkin will speak in the US, while Bank of England representative Jonathan Haskell will also deliver speeches in the UK. We believe that Haskell's speech could be interesting, especially after the release of the UK inflation data.

General conclusion:

On Wednesday, the main event of the day will be the UK inflation data. According to forecasts, inflation may slow down to 4.8% (current value is 6.7%). Such a sharp decline can provoke a flurry of emotions. Not to mention that any kind of significant deviation from the forecast can also fuel movement. Nevertheless, there's a low chance that we will see such sharp movements on Wednesday.

Basic rules of a trading system:

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, post 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 trend line 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.

How to read charts:

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.

Beginning traders 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.