Analysis of Macroeconomic Reports:

There are relatively few macroeconomic reports scheduled for Friday. Some experts refer to the PCE indicator as "important" and "the Fed's favorite," but we do not share that view. The standard consumer price indices are always sufficient to determine the level and trend of inflation. Currently, there are no questions about inflation, thanks to Jerome Powell's numerous speeches. Reports on personal income and spending of the U.S. population are rather formal and are unlikely to provoke a strong market reaction. The University of Michigan Consumer Sentiment Index is an interesting report, but it can only trigger a response if the actual value deviates significantly from the forecast.

Analysis of Fundamental Events:

Among Friday's fundamental events, the speeches of Federal Reserve officials Beth Hammack, Lisa Cook, and John Williams stand out. However, we believe that after Powell's testimonies in the U.S. Congress this week, there are no more unresolved questions regarding Fed monetary policy. And even less so regarding its influence on the dollar exchange rate. Despite the Fed's intention to keep the rate at 4.5% (unlike the European Central Bank and the Bank of England), the dollar continues to fall.

The trade war remains the number one issue in terms of market significance, and there are still no signs of its resolution or conclusion. In the near future, the situation may become even more tense, as Trump has failed to sign a single trade agreement (except with the UK). His political approval rating has fallen to its lowest level.

Conclusions:

On the last trading day of the week, both currency pairs may continue to rise, as the Middle East war has ended while the Global Trade War continues. We will soon find out whether the U.S. will manage to sign a trade deal with any country other than the UK. Several significant developments are anticipated in the coming weeks, and the dollar has strong prospects for continued decline.

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.