Analysis of Macroeconomic Reports:

There are extremely few macroeconomic reports scheduled for Wednesday. Essentially, only the report on industrial production in the European Union can be noted. In the U.S., the UK, and Germany, there are no important reports scheduled for today. Thus, movements in the currency market today will depend on market sentiment (which has been bullish for the second week in a row) and fundamental events.

Analysis of Fundamental Events:

Among the fundamental events on Wednesday, the speeches of European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey, scheduled for the evening, stand out. Both European central banks are ready to begin tightening monetary policy as early as April, but one cannot be 100% certain of this, as Donald Trump has decided to end the war in Iran. Therefore, the oil and gas market may begin to stabilize soon. If oil and gas prices fall, inflation will stop accelerating, and monetary tightening may not be necessary. Thus, the speeches of Bailey and Lagarde may provide an answer to whether the central banks plan to move from words to action in April or prefer to wait another six weeks.

General Conclusions:

During the third trading day of the week, both currency pairs may continue their upward movement within the current trend, but traders should base their decisions on technical levels and factors. The euro can be traded today in the range of 1.1745-1.1755, while the British pound can be traded in the range of 1.3529-1.3543. We still see no grounds for a sustained and strong appreciation of the U.S. currency (considering all factors, not just geopolitics), so we expect the upward trend to continue in 2025, reaching four-year highs for both the euro and the pound.

Key Principles of the Trading System:

1. The strength of the signal is determined by the time it took to form the signal (bounce or level breakthrough). The shorter the time, the stronger the signal.
2. If two or more trades were opened around any level based on false signals, all subsequent signals from that level should be ignored.
3. In a range, any pair can generate a lot of false signals or may not generate them at all. Technical levels may be ignored.
4. On the hourly timeframe, it is advisable to trade MACD signals only when volatility is good, and the trend is confirmed by a trendline or trend channel.
5. If two levels are located too close together (5-20 pips apart), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

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

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market 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.