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Fundamental analysis

08.11.202407:18 Forex Analysis & Reviews: What to Watch on November 8? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Very few macroeconomic events are scheduled for Friday. Essentially, the University of Michigan Consumer Sentiment Index in the U.S. stands out. This index is undoubtedly significant and noteworthy, but market reaction is likely only if the actual value deviates significantly from the forecast. Today, the market may also continue to respond to the Federal Reserve meeting results and statements made by Fed Chair Jerome Powell. We believe the U.S. dollar has solid chances for growth today.

Analysis of Fundamental Events:

Fundamental events on Friday include speeches by European Central Bank Monetary Policy Committee members Cipollone and McCaul, Bank of England Chief Economist Huw Pill, and Fed Governor Michelle Bowman. We believe these officials are unlikely to make any critical announcements, as Powell and BoE Governor Andrew Bailey provided all the necessary information to the market yesterday, while ECB President Christine Lagarde did so last week.

General Conclusions:

On the last trading day of the week, both currency pairs may resume their decline. Both pairs have encountered strong resistance levels that they could not break through yesterday. Therefore, until these levels are surpassed, further strengthening of the U.S. dollar can be expected. During the European trading session, the market may continue to digest the results of the Fed meeting, which primarily point toward strengthening the U.S. dollar.

Basic Trading System Rules:

1. The strength of a signal is determined by the time it takes to form (whether a bounce or breakthrough of a level). The quicker the formation, the stronger the signal.
2. If two or more trades have been made near a level due to false signals, any further signals from that level should be ignored.
3. In a flat market, a pair can generate many false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trading occurs between the start of the European and middle of the US sessions, after which all trades should be manually closed.
5. On the hourly time frame, it's recommended to trade MACD indicator signals only when there is good volatility and a trendline or trend channel confirms a trend.
6. If two levels are too close together (5 to 20 pips apart), they should be treated as support or resistance areas.
7. After the price moves 15-20 pips in the intended direction, set the Stop Loss to breakeven.

What's on the Charts:

Support and Resistance Levels: Levels that serve as targets for opening buys or sells. Take Profit levels can be placed around these areas.

Red Lines: Channels or trend lines that indicate the current trend and the preferred trading direction.

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

Major speeches and reports (always found in the news calendar) can significantly impact currency pair movements. Therefore, it's advised to trade cautiously or exit the market during their release to avoid sharp price reversals against prior movements.

Beginners trading on the forex market should remember that not every trade will be profitable. A clear strategy and money management are the keys to success in long-term 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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