Analysis of Macroeconomic Reports:

Few macroeconomic events are scheduled for Monday. In Germany, the IFO Business Climate Index will be released; however, it is unlikely to have a significant impact on the market. Currently, both currency pairs are leaning toward growth, and market participants seem to require little incentive to buy rather than sell. While we do not believe that the growth of the euro or pound will be sustained or widespread, it is essential to acknowledge the existence of local upward trends.

Analysis of Fundamental Events:

The only noteworthy fundamental event on Monday is the speech by European Central Bank President Christine Lagarde. However, she already spoke on Wednesday and Friday without providing any new insights. The first ECB meeting of the year is scheduled for the new week, and the market anticipates a rate cut of 0.25%. This stands in contrast to the Federal Reserve, whose meeting will conclude a day earlier. Based on these fundamental factors, the euro remains at a disadvantage compared to the dollar, and the current upward movement appears to be merely a technical correction.

General Conclusions:

On the first trading day of the new week, market movements are expected to be primarily technical. Given the strong growth of the euro and pound on Friday, a downward retracement on Monday seems logical. As before, close attention should be paid to the trendlines that support the current upward correction. Analyzing higher timeframes can help in determining the direction of the global trend.

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.