Analysis of Macroeconomic Reports:

Few macroeconomic events are scheduled for Thursday, but yesterday's developments showed that the market continues to ignore the majority of data releases. Only a handful of reports are lucky enough to be priced in. Nevertheless, Germany will publish the Ifo Business Climate report today, while the U.S. will release data on durable goods orders and new home sales. In the past, these figures could have significantly impacted price movements—but not now. Even if the market reacts, 90% of the movement in both currency pairs will still depend solely on Donald Trump.

Analysis of Fundamental Events:

There is no point in discussing fundamental events other than Trump's trade war. The dollar decline may continue for as long as Trump keeps introducing new tariffs and raising existing ones. Any escalation may trigger another wave of dollar weakness. Any de-escalation could strengthen the dollar. This week, Trump began shifting his rhetoric on China toward a more conciliatory tone, but this is not yet a de-escalation. Knowing the U.S. president, we wouldn't be surprised if—following reports of tariff reductions for China—Trump raises them again.

Donald Trump stated that he does not intend to keep tariffs on China at the 145% level, which sparked a wave of relief across the markets. Bitcoin, the U.S. dollar, and U.S. stock indices rallied in response. However, Trump did not indicate when or under what conditions the tariffs would be reduced. If a trade deal with China cannot be reached, the White House will unlikely pursue de-escalation. Trump also decided to "pardon" Jerome Powell and not fire him. These two headlines helped the dollar gain some strength on Tuesday and Wednesday.

General Conclusions:

Both currency pairs may move in any direction during the penultimate trading day of the week. The market has already priced in the positive news for the dollar, so it's rather difficult to expect a further drop in both pairs for now. Novice traders can continue to look for signals around technical levels, but let's remember that the market is currently ignoring technicals to a large extent.

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.