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27.05.2025 06:25 AM
What to Pay Attention to on May 27? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

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Very few macroeconomic reports are scheduled for Tuesday. Germany will release the Consumer Sentiment Index, while in the U.S., the report on Durable Goods Orders will be published. The latter may draw market interest, especially since the March report showed a record surge. Orders rose by a remarkable 7.5%, which is easily explained: American consumers and businesses were preparing for Trump's tariffs, ramping up expensive purchases in March to avoid paying double a month later. However, the April figure is expected to plunge by 7.9%, unlikely to support the U.S. dollar.

Analysis of Fundamental Events:

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The only noteworthy fundamental event on Tuesday is a speech by Federal Reserve representative Neel Kashkari. However, as we've mentioned before, speeches by central bank officials currently have no impact on the market, as the central bank's policy direction and stance are already 100% clear, and the market continues to trade based solely on the Trump factor. Many FOMC members have recently commented on the outlook for monetary policy, and it's unlikely Kashkari's position will differ significantly.

We maintain that only the trade war continues to matter for the market. Even though some de-escalation is gradually happening, the conflict is still ongoing. Trump continues to announce potential trade agreements, but this news offers little support to the dollar. The dollar's decline may continue if Trump introduces new tariffs, raises existing ones, or fails to finalize deals with key trading partners. The dollar can also keep falling even without new tariffs simply because market sentiment toward Trump and his policies remains deeply negative.

General Conclusions:

On the second trading day of the week, both currency pairs are expected to continue rising. The uptrend remains intact for both, and the dollar continues to fall for any reason — or none at all. A correction may occur, of course, but the overall direction and market sentiment will not change. Trading should be conducted from key levels while focusing on buying opportunities.

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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