Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for release on Friday, but none of them are of major importance. The only noteworthy release is the University of Michigan Consumer Sentiment Index in the United States, which will be published in the evening. Throughout the day, the markets can only rely on Donald Trump, who might well trigger another storm by announcing new tariffs or dismissing Jerome Powell again. The economic calendars for the Eurozone, Germany, and the United Kingdom are empty.

Analysis of Fundamental Events:

There is nothing significant to highlight from Friday's fundamental events, as no important speeches are scheduled from officials of the Federal Reserve, European Central Bank, or Bank of England. However, as we've said many times, their remarks currently hold very little weight. All three central banks are following a clear trajectory in terms of monetary policy, and their stance is fully understood.

For the market, the trade war remains the primary concern, with no signs of its resolution yet. The situation remains tense, as Trump has managed to finalize only three trade deals, one of which is somewhat questionable, and time is running out. Over the past two weeks, the U.S. president has decided to further increase tariffs on countries that are reluctant to negotiate with Washington, while also raising import duties on copper, pharmaceuticals, and semiconductors.

Despite these discouraging developments, the U.S. dollar has shown active growth over the past three weeks, which blatantly contradicts the fundamental background. We are preparing for a new wave of upward trend on higher timeframes in both currency pairs.

Conclusions:

On the last trading day of the week, both currency pairs may trade very sluggishly, as there are few significant events expected. Technical corrections are still ongoing, but they could end at any moment. Descending trendlines have formed for both pairs, and breaking through them would indicate the resumption of the six-month upward trend. The euro has twice bounced from the 1.1563 level, which may signal the end of the current downward movement.

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.