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04.10.202406:57 Forex Analysis & Reviews: What to Pay Attention to on October 4? An Overview of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Exchange Rates 04.10.2024 analysis

A few macroeconomic events are scheduled for Friday, but almost all are important. First and foremost are the NonFarm Payrolls reports, the unemployment rate, and wage levels in the U.S. These are the data market participants have been waiting for since the beginning of the week. Over the first four days, the dollar received solid support from the macroeconomic and fundamental backdrop, but it's worth noting that the Federal Reserve now bases its decisions more on the state of the labor market and unemployment rather than inflation. If these two reports show unsatisfactory results today, the U.S. dollar could quickly lose "all it has gained through hard work."

Analysis of Fundamental Events:

Exchange Rates 04.10.2024 analysis

Among Friday's fundamental events, the speech by European Central Bank Vice President Luis de Guindos and several of his colleagues stands out. In the U.S., there will also be speeches by Fed representatives. However, today, the market will not pay much attention to central bank officials but to the U.S. macroeconomic data. Moreover, on Monday, Christine Lagarde and Jerome Powell gave comprehensive answers regarding what to expect from the ECB and the Fed at their upcoming meetings. For their views to change, new macroeconomic data would be needed.

General Conclusions:

During the last trading day of the week, the euro and the pound may continue to decline, but everything will depend on the NonFarm Payrolls and unemployment reports from the U.S. today. Movements during the European trading session may be weak, but significant volatility could occur during the U.S. session. Predicting which direction currency pairs will move in the second half of the day is impossible. All that remains is to wait for the release of the reports.

Basic Rules of the Trading System:

  1. The strength of a signal is determined by the time it takes for the signal to form (bounce or break through the level). The less time it takes, the stronger the signal.
  2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
  3. In a flat market, any pair can generate many false signals or none at all. In any case, at the first signs of a flat market, it is better to stop trading.
  4. Trading positions should be opened during the period from the start of the European session until the middle of the US session, after which all trades should be closed manually.
  5. In the hourly time frame, it is recommended to trade based on MACD indicator signals only when there is good volatility and a trend confirmed by a trendline or trend channel.
  6. If two levels are too close to each other (between 5 to 20 pips), they should be considered as a support or resistance zone.
  7. Upon passing 15-20 pips in the intended direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Support and Resistance Price Levels: These levels serve as targets when opening buy or sell positions. They can also be used as points to set Take Profit levels.

Red Lines: These represent channels or trend lines that display the current trend and indicate the preferred trading direction.

MACD Indicator (14,22,3): The histogram and signal line serve as an auxiliary indicator that can also be used as a source of trading signals.

Important Speeches and Reports (always found in the news calendar) can significantly impact the movement of a currency pair. Therefore, trading should be done with maximum caution during their release, or you may choose to exit the market to avoid a sharp price reversal against the preceding movement.

For Beginners Trading on the Forex Market: It's essential to remember that not every trade will be profitable. Developing a clear strategy and practicing money management is key to achieving long-term success in trading.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2024
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