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28.05.2025 06:53 AM
What to Pay Attention to on May 28? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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Very few macroeconomic reports are scheduled for Wednesday. Among the more or less noteworthy reports, only Germany's unemployment rate and the change in the number of unemployed can be highlighted. However, these concerns are only for one country in the Eurozone, and unemployment is currently not a top priority for the European Central Bank. As a result, these reports may trigger only a minimal market reaction and are unlikely to influence the broader picture. Currently, the U.S. dollar is experiencing a period of corrective growth, which may end today.

Analysis of Fundamental Events:

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Among the fundamental events, the speeches by Federal Reserve officials John Williams and Neel Kashkari and Bank of England Chief Economist Huw Pill can be noted. However, as mentioned before, central bank officials' speeches currently do not influence the market, as their policies and outlooks are fully understood. The market continues to trade almost exclusively on the "Trump factor." In recent weeks, many Fed members have already expressed their views on current developments and the prospects for monetary policy. The BoE's position, especially after the latest inflation report, is also clear.

We believe that the market still sees the trade war as the primary factor that is slowly de-escalating but nevertheless ongoing. Donald Trump continues to announce upcoming trade agreements, but this news has done little to support the dollar. The dollar's decline could continue if trade agreements fail to be signed with most countries or negotiations drag on. Even without new tariffs from Trump, the dollar may keep falling due to the market's deeply negative sentiment toward the U.S. president and his policies.

Conclusions:

On the third trading day of the week, both currency pairs (EUR/USD and GBP/USD) may continue moving north. Both pairs remain in an uptrend, and the dollar continues to weaken for various reasons — or even for no concrete reason. Therefore, the current correction is logical and justified but may end as early as today. We will only consider a stronger dollar recovery if the trendlines are broken on both currency pairs.

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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