09.03.202606:59 Forex Analysis & Reviews: What to Pay Attention to on March 9? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Monday. Essentially, the only noteworthy report is Germany's industrial production data for January, but who cares about industrial production right now? On Friday, traders largely ignored another failure of the American labor market and important reports. On Monday, the dollar skyrocketed again, along with oil and gas prices. This week, America and its allies might start a bloody ground war in Iran involving infantry and ground equipment, as missile strikes did not achieve their objectives. Tehran has not fallen and has not abandoned its nuclear program, retaliating for every strike on its territory.

Analysis of Fundamental Events:

There is absolutely nothing significant to highlight from Monday's fundamental events. However, the market's focus is currently directed toward the Middle East rather than central banks. In our view, the U.S. labor market and inflation data for January were, at best, contradictory. In February, the labor market once again fell short of expectations, and inflation may accelerate this week. Thus, macroeconomic data will provide no support for the dollar, and the Fed may soon make decisions not on inflation or the labor market but on the need to finance the war in the Middle East or to stimulate an economy that slowed to 1.4% growth in the fourth quarter.

General Conclusions:

On the first trading day of the week, the market may experience volatility as events in the Middle East continue to unfold. 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 do not see any grounds for strong and sustained growth of the American currency; however, the war in the Middle East may continue to pull both pairs downwards.

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.