Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Tuesday, and none of them are significant. Economic sentiment indices from the ZEW Institute will be published in Germany and the Eurozone, while the US will release the weekly ADP employment change report. All three reports hold little value for traders. The new week began with a correction, so theoretically, this may continue today. Given the strong influence of geopolitical factors, which are unpredictable, it is advised that novice traders closely monitor the technical picture.

Analysis of Fundamental Events:

There is almost nothing to highlight from the fundamental events on Tuesday. In any case, all market attention remains focused on the Middle East and Donald Trump, rather than on central banks. In our opinion, the dollar can only be supported by geopolitics, and that is what is currently happening. Without a new, more severe escalation of the war in the Middle East, it will be difficult for the dollar to continue its rise; without de-escalation of the conflict, there are no reasons for its decline. And currently, there is no sign of de-escalation in the conflict. This week, the ECB and the Fed are set to hold meetings, so there will be no speeches from their representatives. Traders are left to monitor geopolitics and the technical picture.

General Conclusions:

During the second trading day of the week, any movements may be observed in the market, as the vector of events in the Middle East can shift in any direction at any moment. The euro can be traded today in the ranges 1.1455-1.1474 and 1.1527-1.1531, while the British pound can be traded in the range 1.3319-1.3331. We still do not see grounds for strong, sustained growth in the American currency (considering all factors, not just geopolitics), but the war in the Middle East may continue to support the dollar.

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.