Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Wednesday, and none of them are significant. Essentially, the only report to note is the consumer confidence index in Germany, which is a completely secondary report. The dollar is currently trading under the influence of entirely different factors, while the euro and pound remain on the sidelines.

Analysis of Fundamental Events:

Among the fundamental events on Wednesday, the Federal Reserve meeting stands out as the first of the year. Currently, market participants are in consensus that monetary policy parameters will remain unchanged. However, it should be noted that the meeting itself and Jerome Powell's speech (which is under scrutiny due to Trump) could provoke noticeable market volatility. That said, volatility is already high without this. Once the flat on the daily timeframe ended, the price began rising. In our opinion, the only reason for the sharp rise in the euro and pound is Donald Trump's protectionist and autocratic policies. All other factors are secondary. Trump continues to impose tariffs nearly every day, issue threats, set ultimatums, and demand. The market responds to his actions with daily dollar sales.

General Conclusions:

During the third trading day of the week, both currency pairs will be traded based on technical factors. The euro can be traded today in the range of 1.1970-1.1988, while the British pound can be traded in the range of 1.3814-1.3833 or at the level of 1.3763. Of course, the dollar will not simply decline every day. There will be pauses, corrections, and pullbacks. However, we still expect growth in the euro and pound in the medium term. Thus, potentially, long positions are much more relevant than shorts.

Main rules of the trading system:

1. Signal strength is judged by the time required to form the signal (rebound or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened on false signals near a level, then all subsequent signals from that level should be ignored.
3. In a flat, any pair can generate a mass of false signals or none at all. In any case, at the first signs of a flat, it is better to stop trading.
4. Trades are opened during the period between the start of the European session and the middle of the American session; after that, all trades must be closed manually.
5. On the hourly timeframe, MACD-based signals should ideally be traded only when there is good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (5–20 pips), they should be considered a support or resistance area.
7. After a move of 15–20 pips in the correct direction, set the Stop Loss to breakeven.

What is shown on the charts:

Support and resistance price levels — levels that serve as targets when opening buys or sells. Take Profit can be placed near them.

Red lines — channels or trendlines that reflect the current tendency and show which direction is preferable to trade now.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always listed in the news calendar) can strongly affect a currency pair's movement. Therefore, during their release, trading should be done with maximum caution, or positions should be closed, to avoid a sharp price reversal against the preceding move.

Beginner forex traders 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.