Analysis of Macroeconomic Reports:

A significant number of macroeconomic events are scheduled for Friday. The main focus will be on Germany, where reports on retail sales, unemployment, and inflation will be released. Given that the key GDP report for the fourth quarter was disappointing (along with the overall GDP report for 2024), it is challenging to expect positive data. In the U.S., the report on personal consumption expenditures (PCE) will also be published, but this report has consistently shown minimal deviation from forecasts. Therefore, we do not anticipate a strong market reaction to this report.

Analysis of Fundamental Events:

Among the notable events on Friday, the speech by Federal Reserve representative Michelle Bowman stands out. However, both Jerome Powell and Christine Lagarde spoke earlier this week, and we did not see significant market interest in their statements. Powell reaffirmed that the Fed will lower rates very gradually and that Donald Trump has no influence over the institution. Christine Lagarde confirmed that the European Central Bank will continue to decrease rates toward 2%. This information is adequate for the euro to resume its downward trend, yet the market currently lacks clear direction. Volatility is declining, and intraday price movements resemble "fences" and "zigzags."

General Conclusions:

On the last trading day of the week, market movements may be highly unpredictable. The market has largely ignored the meetings of both the Fed and the ECB. Both currency pairs are trending downwards but remain within a local flat. On one hand, an upward correction could continue. On the other hand, what fundamental basis exists for continuing to buy the euro and the pound?

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.