Analysis of Macroeconomic Reports:

Only one macroeconomic release is scheduled for Wednesday — the second estimate of Germany's July inflation. In the EU, second estimates generally do not differ from the first, German inflation carries far less weight than the euro area's overall figure, and inflation as a whole currently plays no role for the European Central Bank, which has lowered the key rate to neutral levels. Therefore, this report is unlikely to have any impact on the euro. Event calendars for the UK and the US are empty today.

Analysis of Fundamental Events:

Among Wednesday's fundamental events, speeches are expected from FOMC members Austan Goolsbee, Raphael Bostic, and Thomas Barkin. As we have already noted, the more Federal Reserve officials express readiness to cut rates, the greater the potential decline of the US dollar. However, it is already clear to everyone that the key rate will be lowered in September.

The primary focus for traders remains the trade war, which gained fresh momentum last week. We still believe that any trade agreements with tariffs are essentially the same trade war, but presented differently. For the US, of course, deals like those signed with the EU or Japan are advantageous. Therefore, each new agreement of this kind could provoke US dollar growth. However, on a global and fundamental level, the market will keep in mind the new trade architecture and Donald Trump's protectionist policy.

Conclusions:

On the third trading day of the week, both currency pairs may pause. There will be no macroeconomic or fundamental background today. Nevertheless, a new decline in the dollar is possible, but it will likely be modest. Trading today should be based solely on technical signals, which are presented in the two articles below.

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.