FX.co ★ What to Pay Attention to on March 23? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

No macroeconomic reports are scheduled for Monday. Thus, throughout the day, both currency pairs may continue to correct after the rise observed last Thursday. Geopolitics is losing influence over traders, but that does not mean traders are no longer paying attention to it. The situation in the Middle East remains tense, and the global energy situation is critical. Therefore, it should not be assumed that the rise of the American currency is impossible.

Analysis of Fundamental Events:

The only significant fundamental event on Monday is a speech by the European Central Bank's chief economist, Philip Lane; however, the markets received comprehensive information about the plans of all three central banks last week. We learned last week that the Federal Reserve is highly unlikely to resume rate cuts before December 2026. The ECB and the Bank of England are prepared to tighten monetary policy if inflation accelerates, but neither has made any specific promises or announcements. Additionally, inflation can accelerate in various ways. All three central banks expect consumer prices to rise due to the conflict in the Middle East, which has caused unprecedented increases in oil and gas prices. Thus, all other regulatory goals are temporarily taking a back seat; attention is fully focused on inflation.

General Conclusions:

On the first trading day of the week, the market may see any movements, as no significant news from the Middle East has emerged in recent days, and there are no macroeconomic reports today. The euro can be traded from the area of 1.1527-1.1531, while the British pound can be traded from the area of 1.3319-1.3331. We still do not see grounds for a sustained rise in the American currency (considering all factors, not just geopolitics), and last week those grounds diminished further.

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.