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14.01.2025 08:08 AM
What to Pay Attention to on January 14? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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The macroeconomic calendar for Tuesday is quite sparse. The only report of interest is the Producer Price Index (PPI) in the U.S., which is expected to have minimal significance for traders. This is primarily because the December inflation report will be released on Wednesday, which will greatly influence the short-term prospects of the dollar. It's important to note that the Federal Reserve's monetary policy is the main driver of the U.S. dollar, and inflation has the most substantial impact on policy decisions.

Analysis of Fundamental Events:

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Among the scheduled events, there are notable speeches from European Central Bank Chief Economist Philip Lane, Bank of England's Sarah Breeden, and Fed representatives Roger Schmidt and John Williams. However, none of these speeches are currently considered critical to the market.

On Monday, several representatives from the ECB spoke, but they did not provide any groundbreaking insights. Some supported continued monetary easing, while others expressed concerns about potential inflation growth. Nevertheless, no significant declarations were made. Regarding the Fed representatives, substantial comments are anticipated following Wednesday's inflation report, which will reveal December's inflation figures.

General Conclusions:

On the second trading day of the week, traders can expect calm and measured movements from both currency pairs. However, Monday's activity demonstrated that the market is highly responsive and does not require major data releases to generate trading activity. Since no major events are scheduled for today, trading decisions should be guided by technical signals.

Key Rules for the Trading System:

  1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
  2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
  3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
  4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
  5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
  6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
  7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15–20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.

Paolo Greco,
Analytical expert of InstaForex
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