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20.03.2025 08:15 AM
What to Pay Attention to on March 20? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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There are several macroeconomic events scheduled for Thursday, primarily in the UK. Key reports will include the unemployment rate, changes in the number of unemployed individuals, and average wages. We do not expect a strong market reaction to these data points, as just a few hours later, the results of the Bank of England's meeting and Andrew Bailey's speech will be announced. Nevertheless, volatility could be quite high today, particularly for the pound sterling. There are no significant reports planned for the European Union today, while the US is only releasing minor reports that are likely to be overshadowed by events in the UK.

Analysis of Fundamental Events:

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Among Thursday's fundamental events, the BoE meeting stands out. It is unlikely that the key interest rate will be changed, but Bailey may share intriguing insights during the press conference. It's important to note that inflation is rising in the UK, just as it is in the US, but the UK faces more serious challenges due to stagnant economic growth. Therefore, Bailey may express a willingness to continue easing monetary policy in order to stimulate the economy. However, this is not certain, as, for instance, the Fed is currently focused on combating high inflation.

General Conclusions:

On the fourth trading day of the week, both currency pairs are likely to fluctuate in either direction, as market movements are currently driven by emotions, particularly those influenced by Donald Trump. The recent Federal Reserve meeting did not elicit a significant market reaction; while the dollar weakened slightly, it had been decreasing for several days before the meeting. The upcoming BoE meeting is expected to impact the market, but the euro and the pound may continue to rise independently of this event. A sustained drop in quotations below two ascending channels could indicate a long-awaited downward correction.

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 speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.

Paolo Greco,
Analytical expert of InstaForex
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