Macroeconomic Report Review:

Very few macroeconomic reports are scheduled for Wednesday, but after Tuesday, a reasonable question arises: Do traders even need macroeconomic data at all? Yesterday, we saw a sharp rise in the US dollar, which is very hard to explain even now, after the fact. Reports on European inflation and US business activity were, if not completely ignored, then at least largely insignificant. Thus, today's JOLTS report on US job openings for July is unlikely to affect the overall technical picture significantly.

Fundamental Events Review:

Among Wednesday's fundamental events, we can note the speech by ECB President Christine Lagarde, who may comment on the August inflation report. It is unlikely her rhetoric will be dovish if consumer prices are rising, so Lagarde shouldn't create problems for the euro. In the US, there will be several speeches by FOMC members, who are becoming increasingly dovish by the day. Thus, from Fed officials, we are expecting statements about monetary policy easing, which could halt the inexplicable rise in the US dollar.

One of the main factors for traders remains the trade war. Since we see no signs of de-escalation, we see no reason for the market to make medium-term dollar purchases. Last week, Donald Trump raised tariffs to 50% for India. As before, the US currency can count on only local growth driven by technical factors or individual events/reports, but nothing more.

General Conclusions:

During the third trading day of the week, both currency pairs will be mainly trading on technical grounds. For the euro, the decline may continue within the sideways channel toward the 1.1590 area (lower boundary). For the pound sterling, signals can be expected to form near the 1.3331 level and the 1.3413–1.3421 area.

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.