Analysis of Macroeconomic Reports:

There are very few macroeconomic publications scheduled for Wednesday. To be precise, there is just one. Much has already been said about the U.S. inflation report, and the market is simply refusing to move until it understands how much inflation has slowed or accelerated in July. In our opinion, this information will not help traders draw conclusions about the Federal Reserve's decisions in September, as, first, the chances of policy tightening are minimal anyway given the disappointing Nonfarm Payrolls report. Secondly, inflation in the U.S. may slow down in July but increase in August.

Analysis of Fundamental Events:

Among the fundamental events on Thursday, only the speech by one of the Fed's Monetary Policy Committee members, Thomas Barkin, is notable. Barkin's comments, like those of other Fed representatives, may be significant in the near term, as the market needs to understand the central bank's current stance. Recent reports on the U.S. labor market have been mixed; inflation has slowed for the second consecutive time but remains quite high. On the one hand, the key rate needs to be raised; on the other hand, why if inflation is decreasing and the labor market is experiencing further difficulties? The more "dovish" comments we hear, the worse the situation for the dollar will become. We believe that the Fed will not tighten monetary policy in September.

The geopolitical background still leaves much to be desired. The U.S. and Iran continue to exchange blows regularly; negotiations are currently not taking place, the Strait of Hormuz remains closed or partially closed, Yemeni Houthis maintain a blockade of Saudi Arabia, and Tehran threatens to fully close the Bab-el-Mandeb Strait if Washington tries to exert pressure on it again. The market does not believe Donald Trump's statements, and Iran now prefers to negotiate with Oman rather than the U.S. Tehran has presented a list of demands to Washington that are necessary for the opening of the Strait of Hormuz, but Trump is unlikely to comply with them.

General Conclusions:

During the penultimate trading day of the week, currency pairs may again trade quite sluggishly, as even yesterday's inflation report failed to stir the market. The euro can be traded today from the area of 1.1527-1.1531, and the British pound from the area of 1.3456-1.3476.

Main Rules of the Trading System:

1. The strength of the signal is assessed by the time it took to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. Technical levels may be disregarded.
4. When trading based on MACD signals on the hourly timeframe, it is advisable to do so only when volatility is high and a trend line or channel supports the trend.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

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

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

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