Analysis of Macroeconomic Reports:

No macroeconomic reports are scheduled for Friday. However, the market remains quite indifferent to macroeconomic data. All recent truly important reports have been ignored. Whereas the market previously bought the dollar solely on the war in the Middle East and the flight from risk, over the past two weeks, it has been selling the dollar amid de-escalation in the conflict.

Analysis of Fundamental Events:

Among the key events on Friday, the speeches by Federal Reserve representatives Thomas Barkin and Christopher Waller stand out. However, the market continues to ignore the monetary policy factor. Therefore, statements from the European Central Bank, Fed, and Bank of England are not significant at this time. Once the geopolitical factor is fully accounted for (assuming no new serious developments arise in the Middle East), the market will return to focus on familiar macroeconomic and fundamental aspects. There are no expectations for the Fed to tighten monetary policy in 2026, while the BoE and the ECB may raise key rates amid rising inflation. However, this fact is not currently helping the euro or the pound. To reiterate: all movements in the market are, in one way or another, related to geopolitics.

General Conclusions:

During the last trading day of the week, both currency pairs may continue to correct, but traders should rely on technical levels and factors. The euro can be traded today in the range of 1.1745-1.1754, while the British pound can be traded in the range of 1.3529-1.3543. We still see no grounds for a strong and prolonged growth of the U.S. currency (considering all factors, not just geopolitics), so we expect the resumption of the upward trend from 2025, reaching four-year highs for both the euro and the pound.

Key Principles of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or level breakthrough). The shorter the time, the stronger the signal.
2. If two or more trades were opened around any level based on false signals, all subsequent signals from that level should be ignored.
3. In a range, any pair can generate a lot of false signals or may not generate them at all. Technical levels may be ignored.
4. On the hourly timeframe, it is advisable to trade MACD signals only when volatility is good, and the trend is confirmed by a trendline or trend channel.
5. If two levels are located too close together (5-20 pips apart), they should be considered a support or resistance area.
6. After moving 15 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.