29.09.202604:22 Forex Analysis & Reviews: What to Watch on September 29? A Review of Fundamental Events for Beginners

Review of Macroeconomic Releases:

Very few macroeconomic releases are scheduled for Tuesday. Essentially the only item of note is the US JOLTS report on job openings. However, recall that this report is effectively released with about a two-month lag, and the number of open vacancies does not directly indicate the current state of the US labor market. There can be many vacancies but far fewer hires. Therefore this is an indirect and far from primary indicator, which the market usually ignores. The calendars for the UK, the eurozone and Germany are empty today.

Review of Fundamental Events:

Among Tuesday's fundamental events are a speech by European Central Bank President Christine Lagarde and further remarks from Federal Reserve officials. The Fed's stance is clear — further monetary tightening in response to elevated inflation. The stances of the ECB and the Bank of England are also not in question. The ECB is ready to continue tightening policy amid rising inflation. The BoE is prepared to begin tightening for the same reasons. Therefore new speeches by officials from all three central banks are unlikely to change market expectations on monetary policy. Moreover, market interest in ECB and BoE policy is minimal at present, so what Christine Lagarde says today likely won't matter much.

The geopolitical backdrop still leaves much to be desired. The US and Iran are not conducting formal talks at the moment, although Donald Trump said his team held a very good meeting with Iranian representatives at the UN General Assembly and that a deal could be signed after the US congressional elections. The market has no faith in such a rosy outcome. Over the weekend Trump rejected Iran's peace proposal, and after the congressional elections he could resume military actions — because (as everyone understands) the probability of a deal remains close to zero. The conflict persists and the war could resume at any moment.

General Conclusions:

During the second trading day of the week currency pairs can calmly continue to fall, since the move currently does not depend on fundamentals, geopolitics or macroeconomics. The euro can be traded today from the 1.1366–1.1377 area, and the pound sterling from the 1.3259–1.3267 areas. Volatility may again be low today.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.