02.06.202606:11 Forex Analysis & Reviews: What to Pay Attention to on June 2? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are relatively few macroeconomic reports scheduled for Tuesday, June 2. An important report on inflation for May will be released in the Eurozone, with expectations that the figure will accelerate to 3.2-3.4%, which would increase the likelihood of the European Central Bank tightening monetary policy. However, it is important to note that inflation in Germany has slowed down from 2.9% to 2.6% in May. Therefore, overall European inflation might turn out to be lower than expected. In this case, the euro could come under market pressure. In the US, the JOLTS report on job openings will be released today, providing an indirect indicator of the state of the US labor market. However, the market will virtually certainly wait for the publication of Nonfarm Payrolls and the unemployment rate before drawing conclusions.

Analysis of Fundamental Events:

Among the noteworthy speeches on Tuesday, there will be those from Neel Kashkari and Beth Hammack at the Federal Reserve, as well as Boris Vujcic at the European Central Bank. The only central bank that may change its key rate at the next meeting is the ECB. However, there is currently no confidence in this, as a rate hike would put additional pressure on the European economy, which is already slowing due to rising energy prices. Therefore, speeches by ECB representatives are interesting, but they have little impact on the euro, as the market remains fully focused on geopolitics.

The geopolitical backdrop is increasingly concerning, as Iran and the US have once again come closer to resuming conflict and failing negotiations. Talks between Washington and Tehran continue, and according to the US president, they are "very successful." However, confirmations of successful diplomacy from Iran are still absent. The parties regularly violate ceasefire conditions, but the ceasefire itself has been extended for another 60 days. It is both cold and hot at the same time.

General Conclusions:

On the second trading day of the week, both currency pairs may trade relatively weakly unless new messages regarding the conflict and ceasefire in the Middle East are released 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.

Basic Rules of the Trading System:

1. The strength of a signal is evaluated based on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were 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 may generate many false signals or none at all. Technical levels may be overlooked.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

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

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

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