Analysis of Macroeconomic Reports:

Several macroeconomic reports are scheduled for Tuesday. Traders will have something to focus on, but at the same time, there will be very few truly important reports. Perhaps the most interesting is the British data, particularly the unemployment report. Additionally, data on the change in the number of unemployed and wages will be released in the UK. In Germany and the Eurozone, the ZEW Economic Sentiment Index will be published. In the US, the weekly ADP report on changes in private sector employment and retail sales figures will be released. Overall, each report could provoke a slight market reaction, but nearly all of them are secondary.

Analysis of Fundamental Events:

Among the significant events on Tuesday are speeches by European Central Bank Vice President Luis de Guindos and FOMC committee member Christopher Waller. However, the market continues to ignore the monetary policy factor, so statements from the ECB, the Federal Reserve, and the Bank of England are not particularly significant at this time. No one expects the Fed to tighten monetary policy in 2026, while the BoE and ECB may raise key rates amid accelerating inflation. However, the geopolitical backdrop is changing almost daily, so central banks are hesitant to make important monetary policy decisions. For instance, this week, the war in the Middle East may resume if a deal between Iran and the US is not signed. And how can a deal be signed if the negotiations have been canceled? Thus, the ECB and BoE might extend their pause through April.

General Conclusions:

During the second trading day of the week, both currency pairs may continue to correct, but traders would be better off focusing on technical levels and factors. The euro can be traded today in the range of 1.1745-1.1754, while the British pound can be traded in the range of 1.3476-1.3489. We still do not see grounds for strong and sustained growth in the US dollar (when considering all factors, not just geopolitics), so we expect a resumption of the 2025 trend, with the euro and the pound approaching 4-year highs.

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.