Macro Report Review:

There are no macroeconomic publications scheduled for Wednesday. The week began fairly actively, with both currency pairs declining, even though the fundamental backdrop rather points to another decline in the dollar. However, Donald Trump's new tariff hikes did not impress market participants, as they are scheduled to take effect only on August 1. And by then, the president's stance on import tariffs could change another ten times. Not to mention the potential signing of trade deals with all the "sanctioned" countries. Thus, what we are observing now is a purely technical correction.

Fundamental Events Review:

Among the key fundamental events on Wednesday are speeches by ECB Chief Economist Philip Lane and ECB Vice President Luis de Guindos. However, as we've noted previously, the position of the European regulator is currently 100% clear, and the rate cut has had no negative effect on the euro exchange rate.

For the market, the most significant issue remains the trade war, for which there are still no signs of resolution. The situation continues to escalate, as Donald Trump has managed to sign only three trade deals. Moreover, the market doesn't understand what there is to celebrate if all tariffs imposed by Trump remain in effect. This week, the U.S. president decided to once again raise tariffs for countries unwilling to negotiate with Washington, while also increasing import duties on copper. As we can see, the situation is not improving over time. Therefore, we still see no grounds for a sustained dollar rally.

General Conclusions:

On the third trading day of the week, both currency pairs may show very sluggish performance, as no important events or releases are scheduled. Technical corrections are ongoing but could end at any moment. Downward trendlines have formed for both pairs, and their break would signal a return to the upward trend.

Basic Trading System Rules:

1. Signal strength is measured by how long it took to form (bounce or breakout). The shorter the time, the stronger the signal.
2. If two or more trades near a level are triggered by false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair can generate multiple false signals or none at all. At the first signs of a flat trend, it's better to stop trading.
4. Trades should be opened between the start of the European session and the middle of the American session. All trades should be manually closed afterward.
5. On the 1-hour chart, MACD signals should only be traded in conditions of good volatility and a trend confirmed by a trendline or trend channel.
6. If two levels are located too close to each other (within 5–20 points), treat them as a support or resistance zone.
7. When the price moves 15–20 points in the correct direction, the Stop Loss should be moved to breakeven.

What's on the charts:

• Support and Resistance Levels: Targets for opening buy/sell trades. Take Profits can be placed near them.
• Red Lines: Trendlines or channels indicating current trends and preferred trading direction.
• MACD (14,22,3): Histogram and signal line—an auxiliary indicator that can also be used for generating signals.
• Important Speeches and Reports (always listed in the news calendar) can significantly impact currency pair movements. During these times, it's advised to trade with extreme caution or exit the market to avoid sharp reversals against the prevailing trend.

Important Note for Beginners: Not every trade will be profitable. Developing a clear strategy and practicing sound money management are the keys to long-term trading success.