Major patterns
Course Units Unit 1 – Introduction to Chart Patterns Unit 2 – Pattern Categories Unit 3 – Double Top Unit 4 – Double Bottom Unit 5 – Head and Shoulders Unit 6 – Inverted Head and Shoulders Unit 7 – Rising Wedge (Continuation) Unit 8 – Rising Wedge (Reversal) Unit 9 – Falling Wedge Unit 1 of 9 SECTION 5 Major Patterns Unit 1 / 9 You might be surprised to learn that price charts frequently form recognizable shapes known as chart patterns. At first, spotting these patterns on a live chart can feel challenging, but with regular practice you will start to identify which formation is developing and use that insight to guide your trading decisions. Next Unit → SECTION 5 Continuation vs Reversal Patterns Unit 2 / 9 There are two primary categories of chart patterns: continuation patterns and reversal patterns. Continuation patterns suggest that the current price movement is likely to resume in the same direction after a pause, while reversal patterns indicate that the price is preparing to change direction. ← Previous Next Unit → SECTION 5 Double Top Unit 3 / 9 Let’s start by looking at some of the most well-known chart patterns. The double top is a classic reversal pattern. It appears when the price attempts to continue rising but fails twice at roughly the same resistance level, bouncing lower each time. After the second rejection, the market often shifts into a downward trend. Visually, the double top looks like the letter “M”. When traders recognize this formation on a chart, they typically look for selling opportunities after one or two candles form following the second pullback from resistance. ← Previous Next Unit → SECTION 5 Double Bottom Unit 4 / 9 The double bottom is the opposite of the double top and has a shape similar to the letter “W”. It usually forms after a prolonged downward movement. Unlike the double top, this pattern signals that the market is preparing for a reversal to the upside after failing twice to push lower. Once the second rejection occurs, traders often look for buying opportunities, typically waiting for one or two confirming candles to appear before entering a trade. ← Previous Next Unit → SECTION 5 Head and Shoulders Unit 5 / 9 The head and shoulders pattern is one of the most widely recognized chart formations and typically appears during an uptrend. It is made up of three peaks. The first peak forms the left shoulder, followed by a higher peak known as the head, and then a lower peak that creates the right shoulder. This structure signals that upward momentum is weakening. Once the right shoulder is completed, the price often reverses and starts moving downward. A key element of this pattern is the neckline, which acts as a support level. When the price breaks below this neckline, traders usually look for opportunities to open Sell positions, using the breakout as confirmation of a potential downtrend. ← Previous Next Unit → SECTION 5 Inverted Head and Shoulders Unit 6 / 9 The inverted head and shoulders pattern is the mirror image of the standard head and shoulders formation and usually appears after a downtrend. In this case, the neckline becomes the key reference level for potential Buy trades. Traders typically wait until a candle fully closes above this line before taking action. Entering a trade earlier is not recommended, as the price may suddenly reverse, indicating that the pattern has not yet been confirmed. ← Previous Next Unit → SECTION 5 Rising Wedge (Continuation) Unit 7 / 9 The rising wedge is a pattern that reflects a temporary pause in the market, showing a phase of uncertainty where buyers and sellers are closely balanced. After this formation, price may either continue in its previous direction or reverse. When a rising wedge appears during a downtrend, it is typically considered a continuation pattern. In this case, price usually breaks below the lower boundary of the wedge and resumes its downward movement. ← Previous Next Unit → SECTION 5 Rising Wedge (Reversal) Unit 8 / 9 When a rising wedge forms during an uptrend, it is usually treated as a reversal signal. As the price approaches the upper boundary of the wedge and fails to push higher, selling pressure increases and the market often begins to move downward. ← Previous Next Unit → SECTION 5 Falling Wedge Unit 9 / 9 The falling wedge is a pattern that can indicate either a trend reversal or a continuation, depending on where it appears on the chart. Unlike the rising wedge, a falling wedge is more commonly followed by a price increase. When it forms after a downtrend, it usually signals a potential reversal to the upside. On the other hand, if it appears during an uptrend, it often confirms that the price is likely to continue moving higher. ← Previous
What are channels and how to put them on
Course Units Unit 1 – Trading Channels Unit 2 – Ascending Channel Unit 3 – Downward Channel Unit 4 – Sideways Channel Unit 1 of 4 SECTION 4 What are Channels and How to Put Them On Unit 1 / 4 In technical analysis, trading channels are another practical tool used to help identify favorable moments to enter a trade. They are usually formed based on trend lines already visible on the chart. In most cases, a trading channel represents the price moving within a defined area between two parallel lines, either during an upward trend or a downward trend. Next Unit → SECTION 4 Ascending Channel Unit 2 / 4 There are three main types of trading channels. An ascending channel is formed when the price consistently creates higher highs and higher lows, indicating a steady upward movement. ← Previous Next Unit → SECTION 4 Downward Channel Unit 3 / 4 A downward channel is identified when the price forms a sequence of lower highs and lower lows, reflecting a consistent decline and a prevailing bearish trend. ← Previous Next Unit → SECTION 4 Sideways Channel Unit 4 / 4 A sideways channel forms when each new high and low stays roughly at the same level as the previous ones, indicating that the price is moving within a stable range without a clear upward or downward direction. ← Previous
Support and resistance levels
Course Units Unit 1 – Key Levels Unit 2 – Breakouts Unit 3 – Zones Unit 4 – Practical Application Unit 5 – Role Reversal Unit 6 – Strength of Levels Unit 7 – Entry Timing Unit 8 – Confirmed Breakout Unit 9 – Stop Loss (Support) Unit 10 – Stop Loss (Resistance) Unit 1 of 10 SECTION 3 Support and Resistance Levels Unit 1 / 10 Here, two key levels are marked on the chart. Unlike trend lines, support and resistance levels are always drawn horizontally, with support located below the price and resistance positioned above it. To identify these levels yourself, you need to find price areas where movement repeatedly slows down or reverses, indicating that the market regularly reacts at those points. In this example, the resistance level forms the upper boundary of the price channel, while the support level defines the lower boundary. Next Unit → SECTION 3 Breakouts Unit 2 / 10 It’s important to note that this description applies to an upward trend. In a downward trend, the roles are reversed, with resistance acting as the lower boundary and support forming the upper boundary. When price breaks decisively through either support or resistance, it is often seen as a strong signal that the market may continue moving in the direction of the breakout. ← Previous Next Unit → SECTION 3 Support & Resistance Zones Unit 3 / 10 In some cases, clear and precise support or resistance levels cannot be identified. When this happens, it is more practical to define broader support and resistance zones rather than exact lines. On the CG Invest trading platforms, these areas can be drawn using either the candle bodies or the wicks, depending on where price reactions occur most frequently. ← Previous Next Unit → SECTION 3 Practical Application Unit 4 / 10 How can support and resistance levels be applied in practice? When analysing a chart, areas such as (a), (b), and (c) can often present favourable opportunities for opening buy positions, as price is reacting near support. Likewise, points like (d), (e), and (f) may offer suitable conditions for sell trades, as price approaches or reacts to resistance. That said, support and resistance on their own are not sufficient to make trading decisions. These levels should always be confirmed with additional technical indicators and analysis, which will be covered in the following lessons. ← Previous Next Unit → SECTION 3 Role Reversal Unit 5 / 10 It’s important to remember that support and resistance levels can change roles over time, depending on whether price moves higher or lower. In the example shown, the price tested the resistance level twice at points 1 and 2. Once the price broke above the range, that former resistance turned into a support level, which was later confirmed at points 3 and 4. ← Previous Next Unit → SECTION 3 Strength of Levels Unit 6 / 10 How can you tell whether price is only testing a support or resistance level, or whether it is likely to break through and continue moving further? A common rule is that the more times price reaches a level and reverses from it, the stronger that support or resistance area becomes, and the more difficult it is for price to break through. For this reason, many traders avoid opening positions in the middle of a range, where price is trading between support and resistance, as the next move can be uncertain and harder to predict. ← Previous Next Unit → SECTION 3 Entry Timing Unit 7 / 10 When using support and resistance levels, the most favourable time to enter a trade is after price begins moving away from one level toward the other. A position is typically opened once the first new candle forms inside the range after bouncing from the level. In this approach, it is often advisable to close the trade before price reaches the opposite level, as there is no guarantee that the market will actually touch it before reversing again. ← Previous Next Unit → SECTION 3 Confirmed Breakout Unit 8 / 10 If the price moves below a support level, it is best to wait for one or two candles to form in order to confirm that the breakout is genuine. Once confirmation is visible, a trade can be considered in the direction of the move. In this situation, the former support level usually turns into a resistance level. These explanations are provided for educational purposes only and should not be treated as direct trading instructions. ← Previous Next Unit → SECTION 3 Stop Loss (Support) Unit 9 / 10 Where is the most appropriate place to set a Stop Loss? For example, if a trade is opened 5 pips above a support level, it is logical to place the Stop Loss at a similar distance on the opposite side of that level, just below it. This approach helps protect the position if the price breaks through the support instead of reversing as expected. ← Previous Next Unit → SECTION 3 Stop Loss (Resistance) Unit 10 / 10 In the same way, if the price breaks above a resistance level, a trade can be opened slightly above it, for example 5 points higher. In this case, the Stop Loss would be placed below the former resistance level to protect the position if the breakout fails. ← Previous
Trend Lines
Course Units Unit 1 – What is a Trend Line? Unit 2 – Upward Trend Unit 3 – Downward Trend Unit 4 – Side Trend Unit 5 – Using Trend Lines Unit 1 of 5 SECTION 2 Trend Lines Unit 1 / 5 A trend line is one of the most fundamental tools in technical analysis, used to identify and highlight the current direction of price movement. To draw a trend line on the chart, you need to identify at least two significant highs or two significant lows and then connect them using the trend line tool available on the trading platform. This helps visualise whether the market is moving upward, downward, or sideways. Next Unit → SECTION 2 Upward Trend Unit 2 / 5 An upward trend is identified when both the highs and the lows on the price chart continue to move higher over time. If the price falls below the previous low, this is often seen as a signal that the existing trend may be coming to an end and a reversal could be forming. ← Previous Next Unit → SECTION 2 Downward Trend Unit 3 / 5 A downward trend is characterised by a series of progressively lower highs and lower lows on the price chart, indicating that selling pressure is dominating and prices are continuing to move lower over time. ← Previous Next Unit → SECTION 2 Side Trend Unit 4 / 5 A side trend, also known as a flat or ranging market, occurs when price highs and lows remain at roughly the same levels, indicating a lack of clear directional movement. ← Previous Next Unit → SECTION 2 Using Trend Lines Unit 5 / 5 Trend lines help traders identify key turning points where price is more likely to move higher or lower. They act as visual guides for potential support and resistance areas within a trend. Keep in mind that the more confirmations you see supporting an upward or downward direction, the stronger and more reliable that trend becomes. Well-established trends are generally more difficult to break than those that are only just beginning to form. ← Previous
What is technical analysis?
Course Units Unit 1 – What is Technical Analysis? Unit 2 – Technical Indicators Unit 3 – Indicators & Oscillators Unit 4 – Trend Indicators Unit 5 – Oscillators Unit 1 of 5 SECTION 1 What is technical analysis? Unit 1 / 5 Technical analysis is a fundamental component of financial markets. Every trader wants to understand where an asset’s price is heading, and the first place to look for answers is the live price chart. By observing price behaviour, traders can begin to form expectations about future movements. Even beginners can explore trading platforms and start identifying recurring patterns. Surprisingly, these patterns do exist. Price charts function like a universal language, much like mathematics. Just as formulas and graphs can be understood by mathematicians anywhere in the world, chart patterns can be recognised and interpreted by traders regardless of location. Next Unit → SECTION 1 Technical Indicators Unit 2 / 5 The same principle applies to traders and analysts across the globe. Over time, they have developed a shared way of interpreting price charts, allowing them to identify trading signals and make decisions based on different strategies. Their primary tools are known as technical indicators. These are typically displayed as lines or visual elements that are overlaid on the price chart or shown in a separate window below it, helping traders analyse market behaviour and potential price movements. ← Previous Next Unit → SECTION 1 Indicators & Oscillators Unit 3 / 5 Indicators are used to highlight the direction of the prevailing trend, while oscillators help identify potential turning points in price movement. They are built on specific mathematical formulas that are calculated automatically and presented visually on the trading platform. It is generally believed that combining signals from multiple indicators can provide a more comprehensive view of market conditions and improve the ability to anticipate future price movements. ← Previous Next Unit → SECTION 1 Trend Indicators Unit 4 / 5 Once again, technical indicators are generally divided into two main categories: trend indicators and oscillators. Trend indicators are typically lagging in nature. They are used to confirm that a price trend already exists and usually generate signals after a reversal or change in direction has taken place, rather than predicting it in advance. ← Previous Next Unit → SECTION 1 Oscillators Unit 5 / 5 Oscillators are designed to provide early signals of potential trend changes. They evaluate the strength of current price movement and help determine whether momentum in a rising or falling market is still strong, or whether a correction is likely to occur, meaning a temporary move in the opposite direction. ← Previous
How to trade on the USD pairs
Course Units Unit 1 – USD Importance Unit 2 – Bretton Woods Unit 3 – Gold Standard Unit 4 – USD Peg Unit 5 – System Collapse Unit 6 – Liquidity & Fed Unit 7 – Global Usage Unit 8 – Political Pressure Unit 9 – Exorbitant Privilege Unit 10 – Global Impact Unit 1 of 10 SECTION 7 How to Trade on the USD Pairs Unit 1 / 10 The US dollar sits at the core of most Forex trading strategies. No other currency appears in as many currency pairs, and it also serves as the base currency for commodities and US equities. Because of this, movements in the dollar tend to ripple across multiple markets at the same time. In this lesson, you will learn why the global financial system is so heavily dependent on the US dollar and why developments in the US economy and its monetary policy are among the most influential factors driving market news and price movements. Next Unit → SECTION 7 The Bretton Woods Conference Unit 2 / 10 The dollar has been called the “global reserve currency” since 1944, when nations met in the United States at the Bretton Woods conference to restore financial order after World War II. With Europe and Japan devastated, the US economy strengthened significantly. Many countries also sent their gold reserves to the United States for safekeeping, making America the strongest economic power at the time. ← Previous Next Unit → SECTION 7 The Gold Standard Unit 3 / 10 The United States already held the world’s largest gold reserves. Many countries operated under the gold standard, linking their currencies directly to gold. However, the war disrupted this system, and the gold standard gradually lost its relevance and effectiveness. ← Previous Next Unit → SECTION 7 USD Peg System Unit 4 / 10 Under the Bretton Woods Agreement, only the US dollar remained directly linked to gold. Other currencies were pegged to the dollar, strengthening its global dominance and establishing it as the world’s primary reserve currency. ← Previous Next Unit → SECTION 7 Collapse of the System Unit 5 / 10 The agreement lasted for decades before being abandoned. Europe’s rapid recovery and the financial burden of the Vietnam War created imbalances. By 1971, countries held large amounts of depreciating US dollars, bringing the system to an end. Despite this, the dollar remained dominant, representing over 55% of global FX reserves — more than $6.3 trillion. ← Previous Next Unit → SECTION 7 Liquidity & The Federal Reserve Unit 6 / 10 Strong global demand supports the dollar. US debt markets are among the most liquid worldwide. The US Federal Reserve is the most influential central bank globally and often sets broader monetary policy trends. ← Previous Next Unit → SECTION 7 Why the Dollar is Globally Used Unit 7 / 10 The US dollar is widely used as a store of value and for international trade settlements. Oil is priced in US dollars due to a historical agreement between the US and Saudi Arabia, influencing global benchmarks like Brent. ← Previous Next Unit → SECTION 7 Political & Economic Pressure Unit 8 / 10 Countries attempting to challenge dollar dominance, such as Iraq or Libya, reportedly faced strong political or economic pressure. More than one third of global debt is denominated in US dollars, reinforcing its global position. ← Previous Next Unit → SECTION 7 Exorbitant Privilege Unit 9 / 10 France’s finance minister once described the dollar as having an “exorbitant privilege” due to its reserve currency status. A stronger dollar often pressures commodities and emerging markets as capital flows into dollar assets. ← Previous Next Unit → SECTION 7 Conclusion Unit 10 / 10 When the US Federal Reserve sets interest rates, its decisions influence not only the domestic economy but global financial conditions as well. The dollar’s global reserve role ensures that US monetary policy impacts markets worldwide. ← Previous
How to trade on the EUR pairs
Course Units Unit 1 – Introduction Unit 2 – Debt Crisis Unit 3 – Euro Resilience Unit 4 – Central Banks Unit 5 – Press Conferences Unit 6 – Live Reactions Unit 7 – Psychology Unit 8 – Inflation Unit 9 – ECB Rates Unit 10 – CPI Unit 11 – PMI Unit 12 – PMI Trading Unit 1 of 12 SECTION 1 How to trade on the EUR pairs Unit 1 / 12 The euro was introduced in early 2000 as a shared currency for 12 member countries, and by 2019 the Eurozone had expanded to include 19 nations. These economies, particularly the smaller ones, are highly interconnected, which means that economic or political developments in countries such as Germany, France, Italy, or Greece can quickly influence the value of the common currency. It is important to distinguish between the Eurozone and the European Union. The Eurozone represents a deeper level of economic integration, as its members not only use the same currency but also follow a unified monetary policy set by the European Central Bank. The European Union, by contrast, includes more countries, not all of which have adopted the euro. While some EU members have not yet transitioned to the euro, the long-term objective of the region’s development remains wider adoption and circulation of the single currency. Next Unit → SECTION 2 Eurozone Debt Crisis Unit 2 / 12 The Eurozone debt crisis, which peaked around 2011, significantly disrupted these ambitions. Since then, doubts have persisted about whether such diverse economies, ranging from Germany to Greece and holding very different fiscal views, can sustainably operate under a single currency. This uncertainty has contributed to a notable decline in the euro’s share of global central bank reserves, despite the fact that more than 35% of worldwide trade transactions are conducted in euros. At the same time, the euro has become increasingly sensitive to political developments in countries such as Italy and Greece, where high debt levels and recurring tensions with EU authorities have raised concerns. These factors often fuel fears of fragmentation within the European Union, prompting traders to take short positions on the euro in response to heightened political and financial risk. ← Previous Next Unit → SECTION 3 Euro Resilience Unit 3 / 12 It is also worth remembering how severely countries such as Spain, Portugal, and Italy were affected during the 2008 financial crisis. Greece went through multiple debt restructurings, and Italian government bonds were at times viewed by investors as highly speculative. Despite this prolonged period of stress and uncertainty, the euro remained intact. Although the currency experienced sharp and extended fluctuations, its exchange rate against the US dollar eventually returned to levels similar to those seen in the early years of the euro’s circulation. This demonstrated the resilience of the single currency, even under significant economic and political pressure. ← Previous Next Unit → SECTION 4 Central Bank Communication Unit 4 / 12 In addition, the transparency of the European Central Bank’s actions makes fundamental analysis more predictable over time. With experience, traders learn how to read between the lines of central bank statements and understand how specific wording can influence price movements in currency pairs. Particular attention should be given to monetary policy decisions from both the ECB and the US Federal Reserve. These institutions meet roughly every six weeks to decide on interest rate changes and update their economic outlook. The official language used in these announcements is usually carefully worded and neutral in tone. While it may appear vague or obvious to less experienced traders, seasoned market participants are able to interpret subtle changes in phrasing and compare current statements with previous ones to gauge shifts in policy direction. ← Previous Next Unit → SECTION 5 Press Conferences Unit 5 / 12 Another major driver of euro volatility is the statement made by the head of the European Central Bank during the press conference, which typically takes place about 45 minutes after the official decision is released. Since 2019, the US Federal Reserve has also introduced follow-up speeches roughly 30 minutes after publishing its decision and updated economic forecasts. Markets react strongly to shifts in expectations, and in many cases the most impactful information comes from these explanations and comments rather than the decision itself. Central banks refer to this approach as the management of expectations. ← Previous Next Unit → SECTION 6 Live Press Conferences Unit 6 / 12 So what actually happens during these press conferences? Journalists from around the world question the head of the ECB about the current economic conditions in the Eurozone, the central bank’s future intentions, and any possible adjustments to monetary policy. These discussions often provide additional context that is not fully reflected in the initial policy statement. The most accurate and up-to-date insights usually come from watching the press conference live. Paying close attention to statements made by Christine Lagarde and Jerome Powell, and observing how the EUR/USD pair reacts in real time, can help you clearly see the connection between central bank communication and market movements. ← Previous Next Unit → SECTION 7 Market Psychology Unit 7 / 12 Market reactions during press conferences can be sharp and sometimes unexpected. It’s important to remember that behind every trade there is a person, and human behaviour is influenced by emotions, fears, and expectations. Quite often, once traders have fully digested and reassessed the statements made by ECB officials, the market may experience sudden corrections or strong follow-through moves. Inflation is another key factor influencing the euro, as the ECB is committed to keeping inflation close to 2%, or slightly below that level. The main takeaway from this lesson is that Forex market movements are strongly driven by interest rate decisions and by the actions central banks take to control inflation and steer economic stability. ← Previous Next Unit → SECTION 8 Inflation and Interest Rates Unit 8 / 12 When actual inflation in the Eurozone, or even forward projections, moves away
How to use the inflation data in your trading
Course Units Unit 1 Unit 2 Unit 3 Unit 4 Unit 5 Unit 6 Unit 7 Unit 8 Unit 9 Unit 10 Unit 11 Unit 12 Unit 1 of 12 How to use the inflation data in your trading Unit 1 / 12 Inflation is one of the most influential fundamental indicators in any economy, which makes it essential for traders to understand how it affects currency values and how it can be used when forming market forecasts. Some traders, even those with experience, assume that because they focus on scalping and execute many short-term trades by simply following price movements, inflation data is not relevant to them. In reality, however, it is important to stay aware not only of inflation figures but also of other key releases in the economic calendar. Market-moving news that is overlooked or ignored can have a negative impact on trading results, even over very short time frames. Next Unit → Inflation and Currency Value Unit 2 / 12 Inflation primarily reflects changes in the prices of goods and services within a country, which is why it has a strong connection to the value of the national currency and its price movements. Economists typically analyse inflation at both the consumer and producer levels, as well as through real estate–related indicators. The Consumer Price Index is the most widely followed measure and is usually calculated on a monthly basis, although in some cases it may be released quarterly. It tracks price changes for a defined basket of goods and services and is published in the economic calendar. Among inflation indicators, CPI is considered the most influential, while producer-level data such as the Producer Price Index generally has a smaller impact on exchange rates and is often viewed as a secondary indicator under normal market conditions. ← Previous Next Unit → Producer Price Index Unit 3 / 12 The Producer Price Index is often viewed as an early signal of inflation. When production costs rise, these increases tend to filter through to consumer prices over time, affecting the cost of goods and services. The reasoning is straightforward. Rising inflation may indicate that the economy is overheating, prompting central banks to consider raising interest rates. Even the expectation of future rate increases can support the national currency. On the other hand, slowing inflation often leads to a more accommodative monetary policy, which can put downward pressure on exchange rates. ← Previous Next Unit → Interest Rates & Inflation Unit 4 / 12 To clarify, interest rates are a key tool used by central banks to guide a country’s monetary policy and influence how attractive or costly borrowing is for businesses and consumers. It is important to remember that inflation is one of the primary reasons central banks decide to adjust interest rate levels, either raising them to cool economic activity or lowering them to stimulate growth. ← Previous Next Unit → Inflation Targets Unit 5 / 12 In developed economies, an inflation rate of around 2% or slightly below is generally considered healthy, while for developing countries the target level is usually closer to 4%. Central banks use these benchmarks when shaping monetary policy over the medium term. When inflation rises sharply or forecasts point to continued increases, central banks often respond by raising interest rates. This approach is referred to as tightening monetary policy, and official statements in such situations are described as hawkish. ← Previous Next Unit → Dovish vs Hawkish Unit 6 / 12 An exception occurs when inflation rises sharply while economic conditions are weakening. In such cases, a central bank may choose to overlook short-term price increases. When inflation is low, the likelihood of future interest rate cuts increases. Analysts often refer to a softening of monetary policy or describe central bank statements as dovish. ← Previous Next Unit → Reading Inflation Data Unit 7 / 12 Traders closely monitor how inflation changes compared to the previous period and how it compares year over year. Once inflation data is released, market participants immediately assess how far the actual figures deviate from expectations. ← Previous Next Unit → Expectations & Oil Prices Unit 8 / 12 Trading is largely driven by expectations. Market participants often anticipate changes in interest rates based on inflation. Traders should also pay close attention to the relationship between inflation and oil prices. ← Previous Next Unit → Deflation Risks Unit 9 / 12 These measures were taken to prevent the world’s largest economies from slipping into deflation. Prolonged price declines can reduce the flow of money within the economy and strain national budgets. ← Previous Next Unit → Monetary Tools Unit 10 / 12 One common approach is reducing interest rates. By lowering borrowing costs, central banks encourage spending. Another key tool is quantitative easing, where central banks purchase bonds to inject liquidity. ← Previous Next Unit → Global Examples Unit 11 / 12 These measures proved effective, allowing the US Federal Reserve to resume higher interest rate expectations. Inflation in the European Union also began to recover, leading to euro strength. ← Previous Next Unit → Core CPI Unit 12 / 12 CPI interpretation plays a key role in the foreign exchange market. Core CPI excludes volatile components and is the primary inflation gauge used by major central banks. ← Previous
Major economic indicators. Part 2
Course Units Unit 1 – Jobless Claims Unit 2 – Interest Rates Unit 3 – Money Supply Unit 4 – Nonfarm Payrolls Unit 5 – Personal Income Unit 6 – Producer Price Index Unit 7 – Retail Sales Unit 8 – Trade Balance Unit 9 – Unemployment Rate Unit 1 of 9 SECTION 1 Primary Jobless Claims Unit 1 / 9 Primary Jobless Claims measure the number of people who filed for unemployment benefits for the first time during a given period. This indicator is closely watched because a lower number of new claims suggests a stronger economy and a more stable labour market. Higher employment levels generally support increased consumer spending and stronger GDP growth. As a result, when jobless claims come in below market expectations, it often signals economic strength, which can impact currency pairs such as USD/JPY, potentially pushing the pair lower. and consumer spending. Primary Jobless Claims data is released on a weekly basis, typically every Thursday. Next Unit → SECTION 2 Interest Rate Decisions Unit 2 / 9 An interest rate decision refers to the rate set by a central bank at which it lends to domestic commercial banks. The level of this rate plays a major role in determining how attractive a country’s currency is to foreign investors, as higher rates generally offer better returns on investments. This decision is closely monitored because it reflects changes in economic conditions over time and signals how strong and appealing a currency may be, such as the US dollar in the case of the United States. Interest rate announcements are typically released on a quarterly basis by the world’s major central banks, including those in the United States, Europe, the United Kingdom, Japan, Switzerland, Australia, and New Zealand. ← Previous Next Unit → SECTION 3 Money Supply Unit 3 / 9 Money supply refers to the total amount of money currently available for spending within a country’s economy. This indicator is closely monitored because it acts as a leading signal for potential inflation and provides insight into future central bank policy decisions. A higher level of money in circulation generally reflects economic confidence and can support the strength of the national currency. In the United States, money supply data is typically released every Thursday. ← Previous Next Unit → SECTION 4 Nonfarm Payrolls Unit 4 / 9 The Nonfarm Payrolls report is a key economic release that measures the number of jobs added by US businesses, excluding the agricultural sector. The data is broken down by industry, providing a broad view of employment trends across the economy. This report is closely watched because rising employment can signal business expansion and increased economic activity, which may also influence stock markets. Higher employment levels typically support greater consumer spending and overall economic growth. The report also includes information on working hours and average wages, with sustained growth potentially leading to higher interest rates. When the figures exceed market expectations, it often results in downward pressure on the EUR/USD pair. Nonfarm Payrolls data is published on the last Friday of each month. ← Previous Next Unit → SECTION 5 Personal Income Unit 5 / 9 Personal income measures the total earnings received by individuals within a country, including wages, interest, dividends, and other sources of income. This indicator is considered a coincident indicator, as it reflects current consumer purchasing power. Higher personal income levels generally support stronger consumer demand, which benefits the overall economy. When incomes rise, people are more likely to spend, helping to circulate money back into economic activity. Personal income data is released on a monthly basis, usually after the 20th of the month. ← Previous Next Unit → SECTION 6 Producer Price Index (PPI) Unit 6 / 9 The Producer Price Index tracks changes in the prices that domestic producers receive for their goods and services. The report focuses on internal production and does not include imported goods. This indicator is important because it can signal future inflation and potential shifts in economic policy. Rising production costs are often passed on to consumers, leading to higher prices at the retail level. As living costs increase, purchasing power may decline, which is why the Producer Price Index is often viewed as a leading indicator of inflation. PPI data is released on a monthly basis, typically in the week following the Nonfarm Payrolls report. ← Previous Next Unit → SECTION 7 Retail Sales Unit 7 / 9 Retail sales measure changes in the total value of goods sold by retailers, including items such as food, clothing, and vehicles. This indicator is considered a leading signal for economic activity. Strong growth in retail sales suggests higher consumer spending, which can boost economic growth, increase inflationary pressure, and raise the likelihood of central bank intervention. Conversely, a decline in retail sales may point to weakening demand and could signal an upcoming economic slowdown or recession. Retail sales data is typically released on the 13th of each month. ← Previous Next Unit → SECTION 8 Trade Balance Unit 8 / 9 The trade balance represents the difference between a country’s exports and imports. When the value of exports exceeds imports, the country records a trade surplus. When imports are significantly higher than exports, a trade deficit occurs This report is considered a lagging indicator of economic performance. Persistent trade deficits can lead to the accumulation of debt, which may place downward pressure on the national currency over time. Trade balance data is typically released on the 19th of each month. . ← Previous Next Unit → SECTION 9 Unemployment Rate Unit 9 / 9 The unemployment rate shows the proportion of people without a job during the previous month. It is calculated by dividing the number of unemployed individuals by the total working-age population, excluding groups such as retirees and children. This indicator is considered a lagging measure and can set off a chain reaction within the economy. Higher unemployment often leads to reduced consumer spending, which lowers the amount
Major economic indicators. Part 1
Course Units Unit 1 – Overview Unit 2 – US Data & FX Unit 3 – Building Permits Unit 4 – Consumer Confidence Unit 5 – CPI Unit 6 – Durable Goods Unit 7 – Labour Cost Index Unit 8 – GDP Unit 9 – Housing Starts Unit 10 – Industrial Production Unit 1 of 10 SECTION Major Economic Indicators – Part 1 Unit 1 / 10 Open the economic calendar on and look for major economic releases marked with two or three exclamation points. These indicators represent statistical data that typically have the strongest impact on the currencies of the countries involved. Traders usually focus on the difference between the actual released figure and the market forecast. The larger the gap between these values, the higher the likelihood of increased volatility on the price chart of the affected asset. In most cases, this impact is seen directly in the national currency of the country where the data is released. Next Unit → SECTION US Economic Data & Currency Pairs Unit 2 / 10 In many cases, traders tend to focus on US economic news, as it is often easier for beginners to interpret. This means that attention is usually centred on the US dollar. When US data is released and comes in stronger than market expectations, the dollar typically strengthens. As a result, the EUR/USD chart may move lower, since the dollar is the quote currency in this pair and a stronger dollar means fewer dollars are needed to buy one euro. For traders who prefer clearer price relationships, the USD/JPY pair can be a simpler option. In this case, the US dollar is the base currency, and the Japanese market is usually closed at the time major US data is released. When the news supports a stronger dollar, the USD/JPY chart will generally move higher, reflecting the direct relationship between the dollar’s strength and the pair’s price. ← Previous Next Unit → SECTION Building Permits Unit 3 / 10 Building permits refer to the monthly report published by the US government that shows the total number of construction permits issued during that period. This data is closely monitored because it offers valuable insight into the future direction of the economy. An increase in building permits usually signals growth in construction activity and related sectors, making it an important leading indicator for traders who focus on currency pairs involving the US dollar. The report is typically released between the 17th and 18th of each month. ← Previous Next Unit → SECTION Consumer Confidence Index Unit 4 / 10 The Consumer Confidence Index measures how positive or negative consumers feel about the current economic environment and future outlook. It is based on surveys that assess people’s willingness and ability to make purchases in the near term. This indicator is closely watched because strong consumer confidence suggests improving living standards and higher consumer spending. Increased spending supports economic growth, boosts overall economic activity, and can strengthen the value of the national currency. The Consumer Confidence Index is usually released on the last Tuesday of each month. ← Previous Next Unit → SECTION Consumer Price Index (CPI) Unit 5 / 10 The Consumer Price Index reflects changes in the cost of living within a country by tracking the prices of a basket of consumer goods and services, such as food and beverages, housing, transportation, and healthcare. It is widely used as a measure of inflation. This indicator is closely followed because it is a key lagging indicator. Traders use CPI data to assess inflation trends and anticipate possible adjustments to interest rates, allowing them to plan their trades accordingly. CPI data is released on a monthly basis. ← Previous Next Unit → SECTION Durable Goods Orders Unit 6 / 10 Durable Goods Orders track the number of new orders placed for the manufacture and delivery of long-lasting goods, such as machinery and engines. This indicator is important because it provides insight into the pace of economic growth. An increase in orders suggests higher future production levels, giving an indication of factory workloads ahead. This can directly influence sales performance and employment conditions, including working hours for employees. The data is typically released around the 20th of each month. ← Previous Next Unit → SECTION Labour Cost Index Unit 7 / 10 The Labour Cost Index measures changes in wages, bonuses, and employee benefits across all non-agricultural sectors. The data is gathered through surveys conducted among employers. This indicator is closely linked to inflation, as labour costs represent a significant expense for businesses. It is also carefully monitored by the US Federal Reserve, which uses the data as an important reference when shaping monetary and economic policy decisions. The Labour Cost Index is released on a quarterly basis. ← Previous Next Unit → SECTION Gross Domestic Product (GDP) Unit 8 / 10 Gross Domestic Product measures the total value of all goods and services produced within a country over a specific period, usually a quarter or a full year. GDP releases often trigger noticeable movements in a country’s currency, as they provide a broad snapshot of economic performance. This data is published not only in the United States but also in many other countries, including Canada, the United Kingdom, and Japan. GDP is closely monitored because it allows traders to compare economic growth across different countries and assess the relative strength of their economies. These comparisons can help in forming expectations about future movements in currency pairs. GDP figures are released on a quarterly basis. ← Previous Next Unit → SECTION Housing Starts Unit 9 / 10 The number of new housing starts measures how many residential construction projects began during the previous month. This indicator is closely linked to overall economic growth. A sustained decline in construction activity can signal a potential economic slowdown or recession, while increasing numbers often point to improving economic conditions. Changes in housing starts can also influence the value of the US dollar, as they reflect