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21.03.2025 07:06 AM
What to Pay Attention to on March 21? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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There are no scheduled macroeconomic events for Friday. The euro and the pound have finally declined against the U.S. dollar. The Federal Reserve has done its part to calm the markets, stating that there is no sign of a recession and that it has no intention of accelerating rate cuts. Moreover, inflation may accelerate in the near term due to Donald Trump's tariff policy and increased economic uncertainty. These two points indicate that the Fed will not rush into monetary policy easing. As a result, the dollar has finally received some genuine support and can now strengthen at least slightly.

Analysis of Fundamental Events:

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There is nothing noteworthy on the fundamental calendar for Friday either. Yesterday, the Bank of England adopted a "pro-hawkish" stance, so the British pound is falling reluctantly. Still, even the pound may continue its decline since no corrections have occurred in recent weeks. The Fed also maintained a hawkish tone, so the U.S. dollar has reason to strengthen. Additionally, the pound has broken below its ascending channel, just like the euro.

General Conclusions:

On the week's final trading day, both currency pairs (EUR/USD and GBP/USD) could continue their long-anticipated decline. Both have broken below their ascending channels, and the Fed's policy stance allows the dollar to recover some of its unjustly lost ground. Of course, no one knows when Trump might announce new trade tariffs, but such actions cannot keep triggering a dollar sell-off indefinitely.

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
© 2007-2025
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