18.02.202607:06 Forex-elemzések és áttekintések: What to Pay Attention to on February 18? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Tuesday. First, the UK consumer price index (CPI) should be noted. It is expected that British inflation will slow to 3%, which would allow the Bank of England to decide on cutting the key rate at the next meeting. Naturally, this is bad news for the British pound. The lower the inflation is, the greater the potential decline in the British currency could be. Secondly, there are U.S. reports on building permits, housing starts, industrial production, and durable goods orders. These reports may influence trader sentiment in the afternoon.

Analysis of Fundamental Events:

Among the fundamental events on Wednesday, the speeches of European Central Bank and Federal Reserve representatives Isabel Schnabel and Michelle Bowman can be highlighted. Following the release of U.S. labor market, unemployment, and inflation data, changes in the rhetoric of FOMC members can be expected. We believe that the Fed's tone may shift to a more "dovish" stance as U.S. inflation approaches 2%. A shift in rhetoric towards a softer position would provide another reason for the market to sell the American currency. Regarding the ECB, the latest inflation report showed a slowdown to 1.7%. If this figure continues to decline, the ECB will be compelled to resort to new monetary easing, although at present, Christine Lagarde is resisting such a scenario.

General Conclusions:

During the third trading day of the week, the main focus should be on the British pound. The euro can be traded today from the area of 1.1830-1.1831, while the British pound can be traded from the area of 1.3529-1.3543 (a buy signal was formed yesterday). We still do not see any grounds for a strong and prolonged rise in the American currency.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it takes to form (rebound or breaking through the level). The shorter the time, the stronger the signal.
2. If two or more trades were opened around a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate numerous false signals or no signals at all. In any case, it is best to stop trading at the first signs of a flat.
4. Trades are opened during the time period between the start of the European session and until the middle of the American session, after which all trades should be manually closed.
5. On the hourly timeframe, signals from the MACD indicator should ideally be traded only when there is good volatility and a trend confirmed by a trend line or channel.
6. If two levels are too close to each other (ranging from 5 to 20 pips), they should be considered as a support or resistance area.
7. After moving 15-20 pips in the correct direction, it is advisable to set the Stop Loss to break-even.

What's on the Charts:

• Support and resistance levels are targets for opening buy or sell trades. Take Profit levels can be placed around them.
• Red lines indicate channels or trend lines that reflect the current trend and indicate the preferred direction for trading now.
• The MACD indicator (14,22,3) – the histogram and signal line – serves as a supplementary 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 the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or it is advised to exit the market to avoid a sharp price reversal against the preceding movement.
• Beginners trading in the Forex market should remember that not every trade can be profitable. Developing a clear strategy and practicing sound money management are the keys to long-term trading success.