Analysis of Macroeconomic Reports:

Several significant macroeconomic events are scheduled for Wednesday. The Services PMI indices will be released for Germany, the United Kingdom, the Eurozone, and the United States. These reports are expected to yield mixed results, as minor deviations from forecasts are unlikely to prompt a strong market reaction. However, significant discrepancies could lead to notable market movements. There will be five reports published today, including two from the U.S., one of which is the highly significant ISM index. In addition, the ADP report on private sector employment will also be released today. This report is often seen as a precursor to the Non-Farm Payrolls (NFP) report. Generally, the market tends to react more to the NFP, while the ADP report is regarded as a secondary indicator.

Analysis of Fundamental Events:

Among the key events to note are the speech by ECB Chief Economist Philip Lane and remarks from Federal Reserve officials, including Thomas Jefferson, Thomas Barkin, Austan Goolsbee, and Michelle Bowman. As usual, an immediate market reaction to these central bank speeches is not anticipated. However, these remarks play a crucial role in shaping or adjusting the broader fundamental context that influences currency movements in the long term. Therefore, these events are significant, as they could either reinforce the prevailing view that the dollar will continue to strengthen or shift sentiment in the opposite direction. At this time, there is no reason to alter our outlook. Once the current corrective phase concludes, we expect to see a considerable decline in both the euro and the pound.

General Conclusions:

On the third trading day of the week, price movements can be quite unpredictable. Novice traders should pay close attention to technical factors today. There will be several macroeconomic events, and each of them could have a localized impact on various currency pairs. In the short term, both the EUR/USD and GBP/USD pairs are trending upwards, while in the long term, they show a tendency to decline. The upward correction is not yet complete, but during this phase, a downward pullback may also occur.

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.