Analysis of macro data:
There won't be much macro data on Wednesday. In Germany, an inflation report will be published early in the morning, but this will be the final value for March, which is unlikely to be significantly different from the preliminary value. Thus, it is unlikely for the market to react to this report. In the United States, an inflation report will be published in the afternoon, which we can consider as important, but at this time, forecasts suggest that the April value will not be significantly different from the March one. If the actual value does not differ significantly from the forecast or the previous one, there will be no reaction to this report either.
At the same time, the actual value may differ from the forecast. Logically, if the report's value is below 4.9%, the dollar may come under pressure. However, if inflation remains unchanged or increases, the dollar may experience a surge of optimism, as the likelihood of another rate hike in 2023 will noticeably increase.
Fundamental events:
There are absolutely no notable fundamental events on Wednesday. Throughout the day, no important speeches or other events are scheduled. Most likely, the euro will spend the day in low-volatility flat or weak downward movement, and the pound may try to continue its sluggish growth.
General conclusions:
On Wednesday, essentially, there is only one important event – the US inflation report. This should be the starting point for Wednesday. The movement can be absolutely anything in the afternoon, but overall a weak correction may continue. On the 30-minute chart, the signals are now "lopsided"; the market is only working on long positions. And even if the euro consolidates below the ascending trend line, that does not mean that it will fall further. As for the pound, it may continue to rise, and on Thursday, after the meeting, anything can happen.
Basic rules of the trading system:
1) The strength of the signal is determined by the time it took the signal to form (a rebound or a breakout of the level). The quicker it is formed, the stronger the signal is.
2) If two or more positions were opened near a certain level based on a false signal (which did not trigger a Take Profit or test the nearest target level), then all subsequent signals at this level should be ignored.
3) When trading flat, a pair can form multiple false signals or not form them at all. In any case, it is better to stop trading at the first sign of a flat movement.
4) Trades should be opened in the period between the start of the European session and the middle of the US trading hours when all positions must be closed manually.
5) You can trade using signals from the MACD indicator on the 30-minute time frame only amid strong volatility and a clear trend that should be confirmed by a trendline or a trend channel.
6) If two levels are located too close to each other (from 5 to 15 pips), they should be considered support and resistance levels.
On the chart:
Support and Resistance levels are the levels that serve as targets when buying or selling the pair. You can place Take Profit near these levels.
Red lines are channels or trend lines that display the current trend and show in which direction it is better to trade now.
The MACD indicator (14, 22, and 3) consists of a histogram and a signal line. When they cross, this is a signal to enter the market. It is recommended to use this indicator in combination with trend patterns (channels and trendlines).
Important announcements and economic reports that can be found on the economic calendar can seriously influence the trajectory of a currency pair. Therefore, at the time of their release, we recommend trading as carefully as possible or exiting the market in order to avoid sharp price fluctuations.
Beginners on Forex should remember that not every single trade has to be profitable. The development of a clear strategy and money management is the key to success in trading over a long period of time.
