Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Thursday. Only Germany's industrial production and U.S. jobless claims are worth noting. However, it is widely understood that these are secondary reports, which will be overshadowed by the Bank of England meeting and the news flow from the White House. Thus, the macroeconomic background will be virtually absent today.

Analysis of Fundamental Events:

Among Thursday's fundamental events, the Bank of England meeting certainly stands out. The decision it makes may prove controversial or unexpected. We are not convinced that the key rate will be lowered, as most experts predict. At the same time, the potential rate cut is likely already priced into the current exchange rate of the British currency. Therefore, even if the rate is reduced, the pound sterling could still continue its upward move.

The market's primary focus remains on the trade war, which intensified last Friday. We still believe that any trade agreement that maintains tariffs is just a trade war in disguise. Deals like those with the EU or Japan benefit the U.S., of course. As a result, each such agreement could prompt a short-term rise in the U.S. dollar. However, on a global and fundamental level, the market is already pricing in the new trade architecture and Donald Trump's protectionist policies.

Meanwhile, the U.S. President continues to impose new tariffs and raise existing ones, seeking payments from countries around the world. The impact on the U.S. economy became evident last week. GDP might still grow, but other macroeconomic indicators are unlikely to improve. Recently, Trump has raised tariffs on 60 countries, and yesterday he imposed 50% tariffs on India, which refuses to stop buying Russian oil.

Conclusions:

On this penultimate trading day of the week, both currency pairs may continue the upward trend that began last Friday. From our perspective, the negative events for the dollar last Friday and this week are sufficient to weigh on it for at least another week.

• The euro may continue its growth from the 1.1655–1.1666 area.
• The British pound broke through the 1.3329–1.3331 area yesterday and may continue moving toward the 1.3413–1.3421 area.

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.