Macroeconomic Report Review:

Very few macroeconomic reports are scheduled for Tuesday. However, the single report that will be released could trigger a new storm in the market. We are talking about the annual Nonfarm Payrolls. Clearly, this report is much more important than the monthly data, and the figures for the last four months suggest that a favorable outcome is unlikely. Thus, today the market may get new grounds to sell the dollar.

Fundamental Events Review:

Fundamental events on Tuesday include speeches by representatives of the Federal Reserve, Bank of England, and European Central Bank, but as we have previously discussed, there is no suspense regarding future central bank meetings at this time. The ECB has most likely (90% probability) ended monetary policy easing, having succeeded in bringing inflation down to 2%. The BoE is 90% likely to pause due to rising inflation over the past 10 months. And the Fed, with 99% probability, will actively lower the key rate starting in September. Thus, new speeches from central bank officials will not provide traders with any new information.

General Conclusions:

During the second trading day of the week, both currency pairs may continue their upward movement. The euro has broken through the important 1.1737–1.1745 area, which had acted for three weeks as the upper line of a sideways channel. The pound sterling has overcome the equally important 1.3529–1.3543 area, which also allows for continuing movement to the north. The only report of the day, NonFarm Payrolls, will likely (90% probability) support the decline of the US currency.

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.