18.03.202606:51 Forex-elemzések és áttekintések: What to Pay Attention to on March 18? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Wednesday, but none are particularly significant, especially given the current circumstances. In particular, the complete disregard for the macroeconomic background in recent weeks has been notable. In the Eurozone, the second estimate of February inflation will be released today, which is objectively of little value. Generally, the market reacts to the first estimate. In the US, the Producer Price Index will be published, a derived indicator of inflation that the market also largely ignores. Thus, today, only the Fed meeting could capture traders' attention.

Analysis of Fundamental Events:

Among the fundamental events on Wednesday, the Fed meeting certainly stands out, and it can be conditionally divided into three parts. The first part is the Fed's decision on the key rate, which is essentially already known. The second part is the "dot plot" schedule, which reflects the Monetary Committee members' expectations for changes in the key rate over the next two years. This schedule best indicates how the FOMC's sentiment has changed and is released after every other meeting. The third part is Jerome Powell's speech, which will also give traders insight into how the central bank's sentiment has shifted following events in the Middle East. In our view, there are no grounds for expecting a softening of the "dovish" position, yet markets think otherwise, and the dollar may already have priced in this factor.

General Conclusions:

On the third trading day of the week, the market may experience any movement, as the vector of events in the Middle East could shift in any direction at any time, making it impossible to predict the Fed's mood in light of this event. The euro can be traded today in the range of 1.1527-1.1531, while the British pound can be traded in the range of 1.3319-1.3331. We still see no grounds for strong, sustained growth in the American currency (considering all factors, not just geopolitics), but the war in the Middle East could again support the dollar.

Key Principles of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time taken, the stronger the signal.
2. If two or more trades have been opened at a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can form many false signals or none at all. In any case, at the first signs of a flat trend, it is best to stop trading.
4. Trading deals are to be opened during the period between the start of the European session and the mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferable to trade based on signals from the MACD indicator only when there is good volatility and a trend confirmed by a trend line or trend channel.
6. If two levels are positioned too close together (5-20 pips apart), they should be considered a support or resistance area.
7. Upon moving 15-20 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

The MACD indicator (14,22,3) – the histogram and the signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.