05.05.202606:54 Forex-elemzések és áttekintések: What to Pay Attention to on May 5? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

A few macroeconomic reports are scheduled for Tuesday. Essentially, we can highlight only the ISM Services sector activity index from the US and the JOLTs report on job openings. Both reports are quite important, but the market may easily ignore them for two reasons. First, it has been ignoring much of the macroeconomic data for the past 2.5 months. Second, the geopolitical factor. The war in the Middle East may reignite this week, and traders will have little focus on economic reports. We do not expect the dollar to show a new trend due to geopolitics, but the upward trend is unlikely to continue if missiles start flying in the Middle East again.

Analysis of Fundamental Events:

Among the fundamental events on Tuesday, we can note the speeches of Christine Lagarde, Luis de Guindos, and Philip Lane. However, last week, the Federal Reserve meeting was held on Wednesday, followed by meetings of the European Central Bank and Bank of England on Thursday. We learned that the Fed is not inclined to change monetary policy in 2026, while the ECB and BoE have adopted a wait-and-see position and are not overly concerned about rising inflation, hoping for a resolution to the conflict in the Middle East and the unblocking of the Strait of Hormuz. The ECB and the BoE are prepared to raise key rates this summer if there is a pressing need, while the Fed is not. It is unlikely that the ECB representatives' positions have changed in just a few days.

The geopolitical backdrop is beginning to clarify, but unfortunately, not in a direction that everyone would like. Yesterday, hostilities resumed in the Middle East, and we can only hope that the new escalation will be quickly suppressed. However, the odds of such a development are about as likely as signing a ceasefire agreement between Iran and the US.

General Conclusions:

During the second trading day of the week, both currency pairs may trade with a downward bias if more "hopeful" news comes from the Middle East. The euro can be traded today in the range of 1.1655-1.1666, while the British pound can be traded in the range of 1.3476-1.3489. The correction in the euro continues, while the British pound may come under pressure from geopolitical factors.

Main Rules of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or breakout of the level). The less time it took, the stronger the signal.
2. If two or more trades were opened near any level based on false signals, all subsequent signals from this level should be ignored.
3. In a flat market, any pair can generate many false signals or none at all. Technical levels may be ignored.
4. On the hourly timeframe, it is preferable to trade signals from the MACD indicator only in the presence of good volatility and a trend that is confirmed by a trend line or trend channel.
5. If two levels are too close together (5-20 pips apart), treat them as a support or resistance zone.
6. After a move of 15 pips in the right direction, a Stop Loss should be set to breakeven.

What is on the Charts:

Price levels (areas) of support and resistance – levels that are targets when opening purchases or sales, or sources of signals.

Red lines – channels or trend lines that display the current trend and indicate which direction is preferable to trade now.

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

Important speeches and reports (contained in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be done as cautiously as possible, or one should 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 sound money management are key to long-term trading success.