Macroeconomic Report Analysis:

There are several macroeconomic releases scheduled for Tuesday, with most of them originating from Germany. German data is important for the euro, as Germany is the largest economy in the Eurozone. However, it is still only one country out of 27, so market reactions to German reports are usually limited. Today's reports include retail sales, unemployment rate, changes in the number of unemployed, and inflation. Naturally, the most important release is inflation, which may rise to 2.3%. The higher the inflation, the better for the euro, since this reduces the likelihood of another round of monetary easing by the European Central Bank.

In the U.S., the JOLTS job openings report will be released, while the UK will publish the final estimate of Q2 GDP. As we can see, there will be numerous reports, and some of them will undoubtedly trigger market movements.

Fundamental Events Analysis:

There will also be many fundamental events on Tuesday, but we will not cover every single speech of high-ranking officials. Yesterday alone, there were at least ten speeches from ECB and Fed representatives, which had virtually no effect on the market. The most important event of the day will be Christine Lagarde's speech, though even that may not generate significant trader interest. The ECB's monetary policy does not raise any major questions at the moment, so no important or loud statements from Lagarde should be expected. Only after the September inflation data is released might we see changes in ECB rhetoric.

General Conclusions:

On the second trading day of the week, both currency pairs may move in either direction, as a significant amount of macroeconomic data is released. The British pound has completed its downtrend, which suggests that the euro has likely also completed its own.

• For the euro, the 1.1745–1.1754 area remains relevant, as the price already bounced from it yesterday.
• For the pound, the 1.3413–1.3421 area has been broken through, and therefore new long positions with a target at 1.3466–1.3475 remain valid.

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 Events and Reports: Found in the economic calendar, these can heavily influence price movements. Exercise caution or exit the market during their release to avoid sharp reversals.

Forex trading beginners should remember that not every trade will be profitable. Developing a clear strategy and practicing proper money management are essential for long-term trading success.