Analysis of Macroeconomic Reports:

There are quite a few macroeconomic releases scheduled for Tuesday. In the UK, important reports on unemployment, jobless claims, and wages will be published today. While we cannot say these reports will significantly impact the technical picture or trader sentiment, they may trigger a short-term reaction. In the Eurozone and Germany, ZEW Economic Sentiment indices will be released, which are considered secondary data. In the US, the most important release will be the July inflation report.

Analysis of Fundamental Events:

Among Tuesday's fundamental events, the speech of Federal Reserve Monetary Policy Committee member Thomas Barkin is worth noting. Over the past week, many FOMC members have shifted their rhetoric toward a more dovish stance. The more Fed officials talk about the need to ease monetary policy, the higher the chances we will see more than one rate cut this year. The stronger the dovish sentiment, the lower the dollar could fall in 2025.

For traders, the trade war remains the top concern, which last week took on new momentum. We continue to believe that any trade agreements that maintain tariffs are still trade wars, only "under a different guise." For the US, deals like those signed with the EU or Japan are certainly beneficial. Therefore, each new similar deal may trigger growth in the US dollar. However, on a broader and more fundamental level, the market will keep in mind the new trade framework and Donald Trump's protectionist policy.

Conclusions:

On the second trading day of the week, both currency pairs may continue the upward movement that began last Friday. In our opinion, there have been enough negative developments for the dollar recently for the market to continue calmly selling the US currency. The euro is trading strictly between two price zones, so we need to wait for one of them to be tested. The British pound may either rebound from or break through the 1.3413–1.3421 area today, from which trading positions can be opened.

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.