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26.03.202406:58 Forex Analysis & Reviews: Key events on March 26: fundamental analysis for beginners

Analysis of macroeconomic reports:

Exchange Rates 26.03.2024 analysis

There are few macroeconomic events on Tuesday. Nothing interesting in the euro area. Only the German Consumer Sentiment stands out. However, it is clearly secondary of importance, and Germany is just one country out of 27 in the European Union. The UK economic calendar is quiet. The US Durable Goods Orders will be in the spotlight on Tuesday, but it is important that its actual value differs from the forecast by at least 0.5% or more for the market to react to the report as expected. Overall, we do not expect strong movements today. Monday showed us that both pairs are focused on the corrective movement, but the downtrend persists. Today, we don't expect either currencies to show a notable rise.

Analysis of fundamental events:

There are quite a few fundamental events planned for Tuesday. Take note that not all speeches and interviews by European Central Bank and Federal Reserve officials are included in the calendar. For instance, yesterday, Chicago Fed President Austan Goolsbee spoke, but there was no corresponding entry in the calendar. However, on the other hand, there is no need to expect any important statements from the central banks' representatives at the moment. All three central banks have held their second meetings in 2024, so all the important statements that help the market determine the direction of movement have already been made. Important statements should be expected after the release of new reports on inflation or GDP.

Exchange Rates 26.03.2024 analysis

General conclusion:

There are practically no macroeconomic or fundamental events on Tuesday. Volatility will likely remain weak, and both pairs will continue to correct higher. However, since the downtrend remains intact, we believe that new sell signals should be sought. And since the pair is following a downtrend, it has a better chance of becoming stronger than any corrective movement. Regarding the pound, we can use yesterday's bounce from the level of 1.2648 for small short positions. As for the euro, one can wait for it to consolidate below 1.0838.

Basic rules of a trading system:

1) Signal strength is determined by the time taken for its formation (either a bounce or level breach). A shorter formation time indicates a stronger signal.

2) If two or more trades around a certain level are initiated based on false signals, subsequent signals from that level should be disregarded.

3) In a flat market, any currency pair can produce multiple false signals or none at all. In any case, the flat trend is not the best condition for trading.

4) Trading activities are confined between the onset of the European session and mid-way through the U.S. session, after which all open trades should be manually closed.

5) On the 30-minute timeframe, trades based on MACD signals are only advisable amidst substantial volatility and an established trend, confirmed either by a trendline or trend channel.

6) If two levels lie closely together (ranging from 5 to 15 pips apart), they should be considered as a support or resistance zone.

How to read charts:

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines represent channels or trend lines, depicting the current market trend and indicating the preferable trading direction.

The MACD(14,22,3) indicator, encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a signal source.

Significant speeches and reports (always noted in the news calendar) can profoundly influence the price dynamics. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to prevent abrupt price reversals against the prevailing trend.

Beginners should always remember that not every trade will yield profit. Establishing a clear strategy coupled with sound money management is the cornerstone of sustained trading success.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Paolo Greco,
Analytical expert of InstaSpot
© 2007-2024
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