Analysis of Macroeconomic Reports:

There are several macroeconomic publications scheduled for Tuesday, but none of them are significant. In Germany, for example, GDP data for the second quarter will be published in the third estimate, along with the Ifo business climate index. We consider both reports to be secondary. The event calendar is empty for the Eurozone and the UK. In the U.S., reports on new home sales and the weekly ADP report will be released, both of which we deem absolutely secondary.

Analysis of Fundamental Events:

Among the fundamental events on Tuesday, the speech by Federal Reserve representative Thomas Barkin stands out. Recently, no "fresh" information has been forthcoming from the Fed, so Barkin's speech may be of interest. However, we do not expect a hike in the Fed's key interest rate in September, as all recent macroeconomic reports speak against tightening monetary policy. The European Central Bank could conduct its second monetary tightening this fall, just as the Bank of England is once again facing rising inflation.

The geopolitical backdrop still leaves much to be desired. The U.S. and Iran are not engaged in any negotiations, the Strait of Hormuz remains closed or partially closed, and the Yemeni Houthis maintain a blockade of Saudi Arabia. Tehran has put forward a list of demands to Washington necessary for the reopening of Hormuz, which Donald Trump will not agree to under any circumstances. Iran has also warned Washington that if the blockade of the strait is not lifted, it will conduct a "cleansing" of the strait using its own forces. Trump has decided to initiate an unprecedented economic operation to devastate Iran and threatens to impose sanctions on all countries that interact with it. Iran has responded with threats to close other straits and routes if other nations join the pressure on Washington.

General Conclusions:

During the second trading day of the week, currency pairs may trade somewhat sluggishly, as there will be no significant news today. The euro can be traded today from the area of 1.1655-1.1665, while the British pound can be traded from the area of 1.3631-1.3641. Overall, we expect both the euro and the pound to further strengthen against the U.S. dollar, and only geopolitics or a technical need for correction could impede the upward momentum.

Main Rules of the Trading System:

1. The strength of the signal is assessed by the time it took to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. Technical levels may be disregarded.
4. When trading based on MACD signals on the hourly timeframe, it is advisable to do so only when volatility is high and a trend line or channel supports the trend.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

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

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.