Analysis of Macroeconomic Reports:
No macroeconomic events are scheduled for Monday—not in the U.S., the Eurozone, Germany, or the U.K. Therefore, even if the market was paying attention to the macroeconomic backdrop, today, there is none. The market continues to trade solely on the "Trump factor." At least the euro is on a flat trend (waiting for news), while the British pound seems to be rising without any apparent reason or basis.
Analysis of Fundamental Events:
There is no point in discussing any fundamental events apart from Trump's trade war. The dollar's decline may continue indefinitely if Trump keeps imposing new tariffs or raising existing ones. We advise traders to pay close attention to the remarks of top officials from major countries and alliances regarding tariffs. Any escalation may trigger a new wave of dollar selling, while any signs of de-escalation could strengthen the greenback.
Last week, Donald Trump announced plans to impose tariffs on semiconductors, which affects many countries globally. The trade conflict with China remains unresolved and continues to be a top concern for the market. Additionally, Trump is once again pressuring the Federal Reserve to cut interest rates and has even threatened to fire Jerome Powell—although he does not have the authority to do so. On Wednesday evening, the Fed Chair stated that concrete macroeconomic grounds are required for a rate cut, which is currently absent. Trump is reportedly furious over this.
General Conclusions:
On the first trading day of the new week, both currency pairs could move in either direction. As we can see, the British pound is confidently rising while the euro remains flat. Any market-moving news today is likely to come only from the White House. If no statements come from Trump, then the current trading behavior of both currency pairs is unlikely to change.
Key Rules for the Trading System:
- Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
- False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
- 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.
- Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
- 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.
- Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
- 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.
