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04.06.2025 07:27 AM
What to Pay Attention to on June 4? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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There are not many macroeconomic reports scheduled for Wednesday. Of course, we should note the services sector business activity indices for Germany, the UK, the EU, and the US. However, we'd like to remind you that the market barely noticed these indices on Monday. Yesterday, the JOLTs report, which showed a decent figure, triggered a 20-pip rise in the dollar, only for the dollar to easily lose those gains over the next few hours. Therefore, we believe that only the US ISM Services Index might trigger at least some market reaction, although it is unlikely to significantly impact overall market sentiment. Also worth mentioning is the ADP report on private sector employment in the US, often referred to as the "younger sibling" of the NonFarm Payrolls. However, the figures and trends between the NonFarms and ADP rarely align, so the market will primarily look to the NonFarm Payrolls report for labor market conclusions.

Analysis of Fundamental Events:

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Among Wednesday's fundamental events, the speeches by Federal Reserve representatives Liza Cook and Raphael Bostic can be noted. However, as we have already said, central bank officials' speeches currently have no influence on the market since the central banks' policies and stances are 100% clear, and the market continues to trade solely based on the "Trump factor."

We believe the market still only cares about the ongoing trade war. The dollar's decline may continue if trade agreements with most countries are not signed before the end of the grace period—which ends in about a month. The dollar could continue to fall even without new tariffs from Donald Trump, as the market's attitude towards the US president and his policies remains extremely negative. The International Trade Court ruled to block Trump's tariffs, but by evening, the Appeals Court overturned that decision. Later, news broke about Trump's intention to increase tariffs on steel and aluminum.

Conclusions:

During the third trading day of the week, both currency pairs will likely trade more based on technical factors unless there is new high-impact news from Trump during the day. Therefore, today, we may see calm or even flat movements. The key price range for the euro is between 1.1354 and 1.1363. Meanwhile, the British pound continues to fluctuate freely.

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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