Analysis of Macroeconomic Report:

There are a few macroeconomic reports scheduled for Monday, and some are important. Today, the business activity indices in the manufacturing sectors of Germany, the Eurozone, the UK, and the US will be released as final estimates for October. Recall that second estimates have minimal impact on market sentiment, but the ISM business activity index will be published in the US, which is reported only in one estimate. Therefore, all attention will be on this.

Analysis of Fundamental Events:

There are also a few fundamental events scheduled for Monday. In particular, there are speeches from FOMC members Mary Daly and Lisa Cook. However, the latest FOMC meeting took place just a few days ago, and the market received thorough information on how the US central bank intends to act in the near future. In short, most FOMC officials are inclined to wait for macroeconomic data on the labor market and unemployment, after which it will be clear what decision should be made regarding interest rates at the final meeting of the current year. Additionally, there will be a speech from the European Central Bank's chief economist, Philip Lane, today, but there is no intrigue surrounding monetary policy at the ECB either. The ECB has completed its easing cycle and will only resume it if inflation in the Eurozone consistently falls below 2%. Currently, such a trend is not observed.

General Conclusions:

On the first trading day of the week, both currency pairs may trade erratically again. There will be limited macroeconomic data today, so volatility might be low. The European currency bounced off the 1.1527 level on Friday and may continue to rise towards targets of 1.1571-1.1584. The British pound bounced off the 1.3102-1.3107 area, suggesting it might also continue its upward movement towards a target of 1.3203. If both currency pairs manage to settle below these levels/areas, a decline could resume with targets at 1.1474 and 1.3043.

Basic Rules of the Trading System:

1. The strength of a signal is determined by the time it took to form (bounce or breach a level). The less time needed, the stronger the signal.
2. If two or more trades based on false signals are opened around any level, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate numerous false signals or none at all. In any case, it's best to stop trading at the first signs of a flat market.
4. Trades should be opened during the timeframe between the start of the European session and halfway through the American session; all trades must then be manually closed.
5. On the hourly timeframe, signals from the MACD indicator should ideally be traded only in the presence of good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are too close to each other (between 5 and 20 pips), they should be regarded as a support or resistance area.
7. After the price moves 15-20 pips in the right direction, a Stop Loss should be set to break even.

What to Look at on the Charts:

• Support and resistance price levels are targets for opening buy or sell positions. Take profit levels can be placed near them.
• Red lines indicate channels or trend lines that show the current trend and suggest the preferred direction of trade.
• The MACD indicator (14,22,3) provides a histogram and signal line, serving as an auxiliary indicator that can also be used as a source of signals.

Important statements and reports (always found in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, traders should proceed with maximum caution or exit the market to avoid sudden price reversals against the preceding movement.

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