Macroeconomic Data Overview:

Very few macroeconomic reports are scheduled for Monday. Only two data points are worth noting: Retail Sales in the Eurozone and Construction PMI in the United Kingdom. However, both fall far short of being top-tier releases. Consequently, we do not expect any strong or lasting market reactions to these reports. At the same time, the U.S. dollar still has plenty of fundamental reasons to resume its decline.

Fundamental Events Overview:

There will be several noteworthy events on Monday. In the United Kingdom, Bank of England Governor Andrew Bailey is scheduled to speak. Bailey rarely appears in the public spotlight, so while any shift in BoE policy or tone is not expected, his comments could nonetheless be significant. In the Eurozone, European Central Bank President Christine Lagarde will also give a speech. However, expectations here are low. She spoke three times last week and will speak another three times this week. No meaningful or market-moving information came from her last week, so the same is expected this time. At this point, the ECB is unlikely to change its monetary policy outlook, as current inflation levels do not justify further rate cuts or hikes.

Key Takeaways

On the first trading day of the week, both the EUR/USD and GBP/USD pairs are likely to move with low volatility—that means trends are less likely to develop. GBP/USD has completed its recent downtrend. EUR/USD likely did the same. For EUR/USD, price action should be monitored around the 1.1745–1.1754 zone. For GBP/USD, key trading zones are located between 1.3466 and 1.3475, and between 1.3413 and 1.3421.

Core Rules of the Trading System:

1. The strength of a signal is determined by how long it takes to form (a bounce or a breakout). The shorter the formation time, the stronger the signal.
2. If two or more false signals are triggered near a certain level, it is recommended to ignore further signals from that level.
3. In a flat market, any currency pair may produce multiple false signals, or none at all. It's best to quit trading at the first signs of flat movement.
4. Trades should be opened between the start of the European session and the midpoint of the U.S. session. All trades should be manually closed afterward.
5. On the hourly timeframe, MACD signals should only be used in conditions of strong volatility and when accompanied by a trend confirmed with a trendline or channel.
6. If two levels are positioned too closely (5–20 pips apart), treat the entire area as a single support or resistance zone.
7. Once a trade moves 15-20 pips in the correct direction, set the Stop Loss to breakeven to protect against reversals.

Chart Elements Explained:

• Support and resistance levels – Target zones for opening buy/sell positions. Take Profit levels can be set near these.
• Red lines – Trendlines or channels indicating the current market trend and preferred trading direction.
• MACD indicator (14,22,3) – Histogram and signal line used as an auxiliary signal source.
• Important speeches and reports (always listed in the news calendar) can strongly affect price movement. Caution is advised when trading during such events, or consider exiting the market altogether to avoid sharp reversals.

Note for Beginner Traders: Not every trade will be profitable. A clear strategy and proper money management are essential for long-term success in Forex trading.