Analysis of Macroeconomic Reports:

Very few macroeconomic reports are scheduled for Monday. Reports on industrial production will be released in the European Union and the United States on this day, but the market continues to ignore about 95% of incoming macroeconomic information. Therefore, we do not expect any market reaction to the aforementioned reports. We believe the market will continue to wait for developments in the Middle East, specifically for confirmation of Trump's statements regarding the end of the conflict, the conclusion of a deal, and the opening of the Strait of Hormuz.

Analysis of Fundamental Events:

There is absolutely nothing to highlight among the fundamental events for Monday. The European Central Bank meeting has taken place, but the rate hike has not made an impression on the market. The euro did not appreciate, and the market simply ignored this event and Christine Lagarde's speech. The meetings of the Federal Reserve and the Bank of England are scheduled for this week, so at this time, members of the Monetary Committees cannot provide comments concerning monetary policy. It is likely that both central banks will keep their key interest rates unchanged.

The geopolitical backdrop is gradually improving, but traders currently have only Trump's latest statements about ending the war, concluding a deal, and opening the Strait of Hormuz. Will this information be confirmed? This will determine whether the US dollar continues to decline. Let us remind you that the US president has been promising a deal with Iran for two months. In most cases, this information has not been confirmed. Therefore, the market reacted positively to Trump's statements last night, but with caution.

General Conclusions:

During the first trading day of the week, both currency pairs may trade quite actively due to encouraging geopolitical news over the weekend. The euro can be traded from the area of 1.1584-1.1594, while the British pound can be traded from the area of 1.3456-1.3476. Geopolitics remains the key influencing factor in the currency market.

Basic Rules of the Trading System:

1. The strength of a signal is evaluated based on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were 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 may generate many false signals or none at all. Technical levels may be overlooked.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

The MACD indicator (14,22,3) – histogram and signal line – is a supplementary indicator that can also be used as a source of signals.

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

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