Very few macroeconomic releases are scheduled for Tuesday, and none are important. Germany will publish its second estimate of September inflation, which is unlikely to differ from the preliminary reading. In any case, this concerns inflation in only one EU country, and the market currently pays little attention to European Central Bank tightening. Therefore, whatever September's inflation turns out to be, the euro should not expect help from this report. The US existing-home sales report will be released today, but it is also unlikely to interest the market. The US dollar is rising not because of the strength of the American economy or because of macroeconomic releases.
Review of fundamental events:Tuesday's fundamental events include speeches by ECB representatives (Elderson, Lane), Federal Reserve speakers (Waller, Barkin, Collins), and a Bank of England representative (Dhingra). However, as noted earlier, central banks' monetary policy positions currently raise no questions. The Fed will likely raise the policy rate once more before year-end, the ECB will probably do the same once, and the BoE will also begin tightening. Central bank stances are not influencing EUR/USD and GBP/USD right now.
The geopolitical backdrop remains unsatisfactory. The US and Iran are not conducting official talks at this time, although Donald Trump continues to insist a deal could be signed after the US Congressional elections. Trump also repeatedly claims the conflict between Ukraine and Russia could end very soon — a claim he has been making for almost two years. Thus the market has no faith in such rosy developments. Over the weekend, Trump again shifted his rhetoric toward Iran and said he might resume military pressure after the Congressional elections. He also announced an energy truce between Kyiv and Moscow, which no one in Kyiv or Moscow had heard about.
General conclusions:On the second trading day of the week, currency pairs may continue making sluggish attempts to correct, as expecting more is difficult now. The euro can be traded today from the 1.1132–1.1140 area, and the pound sterling from the 1.3175–1.3180 area. Volatility today may be low.
Key Rules of the Trading System:The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.After moving 15 pips in the right direction, a stop-loss should be set to break even.What to Look for on the Charts:Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.
Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.
The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.
Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.
Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.