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

Analysis of macroeconomic reports:

There are fewer macroeconomic events on Friday, and none of them are crucial. We will only highlight the US reports on Industrial Production for February and the University of Michigan Consumer Sentiment Index for March. Both of these reports may only provoke a market reaction in the case of a significant deviation of the actual value from the forecast. We believe that the main thing is that they don't show disappointing values, as this could hinder the dollar's upward movement, which has just started.

Analysis of fundamental events:

Among the fundamental events, we can highlight European Central Bank Chief Economist Philip Lane's speech. However, as we have already mentioned, we should not expect any important and new information from ECB officials at this time. Last week, the ECB meeting took place, and ECB President Christine Lagarde already provided the market with all the necessary and relevant information. Therefore, it is unlikely for Lane to surprise traders with new statements and remarks.

General conclusion:

We expect both instruments to continue their respective downward movements. The only question is the strength of this movement. Yesterday, the market finally started to sell both pairs, but now it is very important that they maintain the current trend. Last but not least, we still believe that the global fundamental background works in favor of the US currency.

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, after 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 trendline 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.

Beginners 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.