Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Monday, but most of them are unlikely to have much significance. In Germany, a report on retail sales will be published in the morning, followed shortly by the second estimates of the business activity indices for Germany, the EU, and the UK. Second estimates rarely differ from the first ones, so we do not expect a significant market reaction to these reports—at least not a noticeable one. In the afternoon, a much more important ISM index for US manufacturing activity will be published, with only one estimate released. Therefore, the main focus should be on this index and events in the Middle East.

Analysis of Fundamental Events:

General Conclusions:

On the first trading day of the week, the market may see a range of movements, as events in the Middle East can regularly shake the dollar. The euro can be traded today in the range of 1.1745-1.1754, and the British pound can be traded in the range of 1.3437-1.3446. We do not see any basis for strong, sustained growth in the American currency.

Key Principles of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time taken, the stronger the signal.
2. If two or more trades have been opened at a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can form many false signals or none at all. In any case, at the first signs of a flat trend, it is best to stop trading.
4. Trading deals are to be opened during the period between the start of the European session and the mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferable to trade based on signals from the MACD indicator only when there is good volatility and a trend confirmed by a trend line or trend channel.
6. If two levels are positioned too close together (5-20 pips apart), they should be considered a support or resistance area.
7. Upon moving 15-20 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

The MACD indicator (14,22,3) – the histogram and the signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.