06.01.202500:23 Forex Analysis & Reviews: What to Pay Attention to on January 6? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There aren't many macroeconomic events scheduled for Monday, and none are considered highly significant. From our perspective, the most noteworthy report will be on inflation in Germany. Currently, inflation in the Eurozone presents one of the few opportunities for the euro to stop its decline against the dollar. If inflation continues to rise, the European Central Bank might consider pausing its monetary policy easing. As a result, the euro could benefit from high inflation figures in Germany and throughout the EU. However, the Eurozone's inflation data will be released later, and the German inflation report is not expected to have a major impact.

Other reports are of much less significance. The final services PMI data for December, covering Germany, the EU, and the US, are unlikely to differ significantly from their preliminary estimates, which means they are also not expected to spur any notable market reaction.

Analysis of Fundamental Events:

Once again, there are no significant fundamental events scheduled for Monday. Moreover, the market currently does not require additional speeches or comments from central bank representatives regarding monetary policy. This was evident on Thursday, when both the euro and the pound fell sharply without any fundamental or macroeconomic catalysts. All three major central bank meetings took place recently, providing market participants with a comprehensive understanding of the state of the economies and the anticipated future actions of the central banks. We believe these meetings sent a clear message to traders: the US dollar is expected to continue appreciating.

General Conclusions:

On the first trading day of the new week, traders should anticipate a continuation of the upward correction in both currency pairs. The macroeconomic data released today is expected to be weak, and there are no significant fundamental drivers. Therefore, we predict calm trading with a slight upward bias.

Key Rules for the Trading System:

1. Signal strength is determined by the time it takes for a signal to form (bounce or breakout of a level). The shorter the time, the stronger the signal.
2. If two or more false signals are generated near a level, subsequent signals from that level should be ignored.
3. In a flat market, any pair may produce numerous false signals or none at all. In such cases, it's better to stop trading at the first signs of consolidation.
4. Trades should be opened during the European session through the middle of the American session. All trades should be manually closed thereafter.
5. On the hourly timeframe, trades based on MACD signals should only be executed during periods of strong volatility and trends confirmed by trendlines or trend channels.
6. If two levels are very close (5–20 pips apart), they should be treated as a support or resistance zone.
7. After a 15–20 pip movement in the correct direction, set a Stop Loss at breakeven.

What's on the Charts:

Support and Resistance Levels: Targets for opening buy or sell orders. These are ideal points for setting Take Profit levels.

Red Lines: Trendlines or channels reflecting the current trend direction and indicating the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line serving as auxiliary indicators and sources of signals.

Key News Events and Reports: Always listed in the economic calendar, these can significantly impact currency pair movements. Exercise caution or exit the market during such events to avoid sharp price reversals.

Every trade cannot be profitable. The key to long-term success in Forex trading lies in developing a clear strategy and effective money management.