Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Thursday. The British data are of greatest interest. Reports on unemployment for January, wage data for January, and changes in the number of unemployed for February will be released today. The data might turn out worse than forecasts and previous values, as the British economy is still underperforming. In the Eurozone, nothing interesting is expected today besides the ECB meeting. In the US, there are only a few minor reports.

Analysis of Fundamental Events:

Among the fundamental events on Thursday, the European Central Bank and the Bank of England meetings should be highlighted. We believe that both central banks will adopt a more hawkish stance, similar to the Federal Reserve. However, will this play any role for traders? Recall that in recent weeks, the market has been entirely focused on the conflict in the Middle East. It anticipates rising inflation, economic slowdown, and an energy crisis, believing that central banks will adopt a stricter stance on monetary policy in 2026. Yesterday, the Fed confirmed these expectations, and today's ECB and BoE meetings may do the same. We saw a rise in the dollar yesterday (which was quite logical); will we see a rise in the euro and pound today?

General Conclusions:

During the penultimate trading day of the week, the market may experience absolutely any movements, as the vector of events in the Middle East can shift in any direction at any moment. The uncertainty is compounded by the two central bank meetings. The euro can be traded today in the range of 1.1455-1.1474, while the British pound can be traded in the range of 1.3259-1.3267. We still see no grounds for strong, sustained growth in the American currency (considering all factors, not just geopolitics); however, the war in the Middle East continues to support only 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.