FX.co ★ Key events on December 14: fundamental analysis for beginners

Analysis of macroeconomic reports:

There are fewer macroeconomic events on Thursday. Traders will be focusing on the European Central Bank and Bank of England meetings. Plus, Europeans and Brits clearly have not had time to digest the results of the Federal Reserve meeting, so the movements on Thursday will be confusing. In regards to macroeconomic events... The US will release data on retail sales and unemployment benefit claims, but it is clear that these reports will have no impact on the dollar's movement. And even if they do, it will be impossible to identify the market's reaction to these reports. Therefore, it is necessary to focus on fundamental events.

Analysis of fundamental events:

There are two fundamental events scheduled for the day, but they can be divided into a much larger number. Both central banks will announce the results of their meetings. In addition to this, ECB President Christine Lagarde will deliver a speech, and perhaps BoE Governor Andrew Bailey as well. Therefore, there will be many important events on Thursday, and they will overlap with each other. We advise you to be cautious and not forget about the Stop Loss, as the direction of movement can change sharply and frequently.

General conclusion:

On Thursday, we advise you to pay close attention to all fundamental events. It is impossible to predict in advance how the meetings of central banks will end, so we recommend trading extremely carefully and being prepared for any developments.

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.