Macroeconomic Report Review:

There are only a few macroeconomic reports scheduled for Tuesday, but all of them are important. The starting point should be the inflation report from the Eurozone. We would like to note that we expect increased volatility and a return to trending movement this week. However, everything will depend on the nature of the macroeconomic data. If most reports contradict each other or show "tepid" figures, then the sideways (flat) market may continue this week as well. Inflation in the EU is expected at 2%, which is unlikely to impress anyone. A different value, especially one above the forecast, could have an impact. In the US, the ISM Manufacturing Index will be released, which is a highly important indicator in itself.

Fundamental Events Review:

There is absolutely nothing noteworthy among Tuesday's fundamental events, but tomorrow there will be a speech by ECB President Christine Lagarde, who may comment on the August inflation report. If the inflation report is "tepid," there may be nothing to comment on. As for the Fed, new important comments are expected only after the publication of labor market and unemployment reports. Currently, "dovish" pressure within the FOMC is increasing, which only heightens the likelihood of a decline in the US dollar.

One of the main factors for traders remains the trade war. Since we do not see any signs of de-escalation, we also see no grounds for the market to make medium-term purchases of the dollar. Last week, Donald Trump raised tariffs to 50% for India. As before, the US currency can only count on local growth due to technical factors or individual events/reports, but nothing more.

General Conclusions:

During the second trading day of the week, both currency pairs may continue their upward movement; however, much will depend on the release of macroeconomic data. For the euro, new signals are needed in the 1.1655–1.1666 and 1.1740–1.1750 areas. The pound sterling may bounce once again from the 1.3518–1.3532 zone, allowing novice traders to open long positions targeting 1.3574. Market volatility remains low.

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.