29.05.202606:33 Forex Analysis & Reviews: What to Pay Attention to on May 29? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are a few macroeconomic reports scheduled for Friday, May 29. In Germany, a whole set of data will be released, including reports on unemployment and inflation. In particular, inflation may rise above the current 2.9% for May, which will indirectly confirm the European Central Bank's concerns. However, the calendars of events in the UK, the U.S., and the Eurozone are completely empty today. Thus, market activity may be low unless geopolitics intervenes in trading once again.

Analysis of Fundamental Events:

Among the fundamental events on Friday, speeches by Anna Paulson and Michelle Bowman (Federal Reserve) stand out. However, it should be noted that only the ECB can change its key interest rate at the June meeting. There is currently no confidence in this change, as raising the key interest rate would create additional pressure on the European economy, which is already beginning to slow due to rising energy prices. Therefore, the speeches from the Fed's Monetary Committee members are interesting, but nothing more. The market clearly understands that there should be no expectation of a key rate change in June.

The geopolitical background has become more hopeful over the last week, but this week Iran and the U.S. have again approached a resumption of conflict and a breakdown in negotiations. Talks between Washington and Tehran have resumed, and according to the U.S. president, they are "very successful." However, confirmations from Iran regarding the success of diplomacy have not come through. On Tuesday, there was a new violation of the ceasefire in the Strait of Hormuz, and on Wednesday, a member of the Iranian negotiating team stated that nuclear fuel is not a topic for discussion with Washington. On Thursday, both sides exchanged mutual strikes. Regarding the deal announced by Trump, the American president now believes there is no rush.

General Conclusions:

On the last trading day of the week, both currency pairs may trade quite sluggishly if no new information regarding the conflict and ceasefire in the Middle East emerges throughout the day. 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 1.3456-1.3476. Geopolitics remains the key influencing factor in the currency market.

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 show the current trend and indicate the preferred direction 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.