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There will be more macroeconomic events on Wednesday compared to the last two days. Let's start with the less important ones. The EU is set to release its industrial production data. This is not a crucial report, and the market's reaction will likely be weak. There's also a good chance that they may not react at all. The UK will publish reports on GDP and industrial production, but we also consider them secondary of importance. Traders are much more interested in quarterly data on economic growth rather than monthly data. The same goes for the UK industrial production report.
In the United States, the Consumer Price Index for August will be published, and a lot will depend on this report. If inflation rises again, the US dollar could significantly strengthen and the Federal Reserve may decide to raise interest rates in September (although it is not expected at the moment). Otherwise, the US dollar could weaken.
The fundamental events calendar is basically empty with no scheduled secondary events and speeches. Therefore, traders will solely focus on the US inflation report, which will affect both currency pairs.
On Wednesday, beginners should pay attention to the US inflation report. All other reports are secondary of importance and may only trigger a weak market reaction. The only exception is if the value of any particular report deviates significantly from the forecast.
Support and resistance levels are levels that serve as targets when opening long or short positions. Take Profit orders can be placed around them.
Red lines are channels or trend lines that display the current trend and show which direction is preferable for trading now.
The MACD (14,22,3) indicator, both histogram and signal line, is an auxiliary indicator that can also be used as a source of signals.
Important speeches and reports (always found in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it is recommended to trade with utmost caution or to exit the market to avoid a sharp price reversal against the previous movement.
Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and money management is the key to success in trading over a long period of time.
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