Analysis of Macroeconomic Reports:

There are several macroeconomic reports scheduled for Tuesday, but will they hold any significance for traders? Business activity indices for the services and manufacturing sectors will be published for Germany, the Eurozone, the UK, and the US for March. It is possible that European indices may have a slight impact on the movement of both currency pairs in the first half of the day, but American indices are unlikely to have much effect. The market has become accustomed to drawing conclusions about business activity based on the ISM indices, which are published at the beginning of each month. Additionally, one should not forget that Donald Trump may make new statements regarding Iran, which could trigger another storm in the currency market.

Analysis of Fundamental Events:

Among the fundamental events on Monday, only the speeches by ECB Chief Economist Philip Lane and Bundesbank President Joachim Nagel should be noted. However, markets received comprehensive information about the plans of all three regulators last week. We learned that the Fed is highly unlikely to resume rate cuts before December 2026, while both the European Central Bank and the Bank of England are prepared to tighten monetary policy if inflation accelerates. All three central banks expect consumer prices to rise due to the conflict in the Middle East, which has driven unprecedented increases in oil and gas prices. Thus, all other goals of the central banks are temporarily taking a back seat, and the focus is entirely on inflation. It is also worth noting that Trump could make new statements regarding Iran, which might hold much more significance for the market than all other events combined.

General Conclusions:

On the second trading day of the week, the market could experience any movement, as a de-escalation in the Middle East could happen at any time. The euro can be traded today in the range of 1.1584-1.1591, while the British pound can be traded in the range of 1.3403-1.3407. We still do not see grounds for strong and sustained growth of the American currency (considering all factors, not just geopolitics), and those grounds have diminished further over the past week and the beginning of the current week.

Key Principles of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time taken, the stronger the signal.
2. If two or more trades have been opened at a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can form many false signals or none at all. In any case, at the first signs of a flat trend, it is best to stop trading.
4. Trading deals are to be opened during the period between the start of the European session and the mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferable to trade based on signals from the MACD indicator only when there is good volatility and a trend confirmed by a trend line or trend channel.
6. If two levels are positioned too close together (5-20 pips apart), they should be considered a support or resistance area.
7. Upon moving 15-20 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

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

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.