FX.co ★ Key events on December 11: fundamental analysis for beginners

Analysis of macroeconomic reports:

No macroeconomic events planned for Monday. We expect calm movements without any significant changes in the exchange rates of both currency pairs. All the interesting events in the UK, the US, and the eurozone are scheduled for the following days of the week. Therefore, there is no need to rush into the market if it remains in a flat state. There is a high probability of a flat market on Monday.

Analysis of fundamental events:

No fundamental events are planned for Monday either. The downtrend will persist for both the euro and the pound, so both currencies may gradually trade lower. However, we lean towards the idea that the market will take a pause and will not force events before the central bank meetings and important reports of the week.

General conclusion:

On Monday, there are no noteworthy events on the calendar. Therefore, beginners can open positions if strong signals are formed. However, we recommend closing trades and leaving the market at the first signs of a flat market. Volatility may slightly be higher during the US session compared to the European session.

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.