Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Thursday. The only noteworthy report is the US Producer Price Index (PPI), which is significant for the market but carries little weight after the inflation report published the day before. The PPI will indicate how quickly producers are raising prices due to the energy crisis, and, of course, this data will later be reflected in overall inflation. However, we already know that inflation in the US continues to accelerate, while the Federal Reserve remains silent. Therefore, this report is unlikely to elicit any market reaction today. In the UK, the European Union, and Germany, the event calendars are completely empty.

Analysis of Fundamental Events:

Among the fundamental events on Thursday, the European Central Bank meeting and Christine Lagarde's speech are noteworthy. It is essentially already known that the ECB will raise all three key rates by 0.25%. This decision has been known for over a week. However, the market is ignoring this event, just as it is ignoring many other fundamental and macroeconomic events. Therefore, we believe that the ECB meeting and its "hawkish" decision will not impact the euro's exchange rate; any reaction may be merely formal.

The geopolitical backdrop still leaves much to be desired, as Iran and the US have once again edged closer to renewed conflict amid failed negotiations. Talks between Washington and Tehran are interrupted, both sides continue to regularly violate the terms of the truce, and Iran consistently refutes any peace rhetoric from Trump. The new week began with reciprocal shelling in the Middle East, Iran shooting down an American helicopter over the Strait of Hormuz, US attacks on Iranian coastal infrastructure, and Iranian missile strikes on Bahrain, Jordan, and Kuwait. Judge for yourself how close Tehran and Washington are to a peace agreement...

General Conclusions:

During the penultimate trading day of the week, both currency pairs may trade quite actively, given that it is the day of the ECB meeting. However, we doubt that the market will respond to this event as it should. The euro can be traded today from the area of 1.1527-1.1531, while the British pound can be traded from the area of 1.3380-1.3386. Geopolitics remains the key influencing factor in the currency market.

Basic Rules of the Trading System:

1. The strength of a signal is evaluated based on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were 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 may generate many false signals or none at all. Technical levels may be overlooked.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

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

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

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