Analysis of Macroeconomic Reports:

Several macroeconomic publications are scheduled for Monday. If we disregard all secondary reports, the remaining key releases are the Eurozone retail sales report and the ISM Services PMI in the U.S., which is published monthly and is considered more significant than the S&P indexes. Thus, the market may become more active in the afternoon, but it is unlikely to last long or be very strong. We can expect approximately an hour of emotional spikes, after which the market will likely return to a quieter state.

Analysis of Fundamental Events:

Among the fundamental events on Monday, we can highlight the speeches by European Central Bank representatives Christine Lagarde, Isabel Schnabel, and Philip Lane. However, it is worth noting that inflation in the Eurozone slowed to 2.8% as of June, and it cannot be said that this slowdown was caused by the ECB's rate hike at its last meeting. Too little time has passed for the economy to react to the policy tightening. Therefore, the ECB will certainly not rush to raise rates again. Inflation may continue to decline on its own amid falling energy prices.

The geopolitical background remains consistently "conditionally positive." Iran and the U.S. signed an agreement remotely; however, many important issues are still unresolved. In particular, the "nuclear issue," the war between Lebanon and Israel, and the status of the Strait of Hormuz. Theoretically, the market may fear the resumption of full-scale war, but there is clearly not enough reason for the dollar to continue being in demand. After all, Tehran and Washington are still on tracks leading to peace, and negotiations are ongoing, although no one expects them to be quick and easy.

General Conclusions:

During the first trading day of the week, both currency pairs may trade very sluggishly for most of the day. Only the ISM index in the U.S. could stir the market. The euro can be traded from the 1.1420-1.1432 area, while the British pound can be traded from the 1.3319-1.3331 area. We would not expect strong movements and high volatility today.

Basic Rules of the Trading System:

1. The strength of a signal is evaluated based on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more trades were opened at a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat market, any pair may generate many false signals or none at all. Technical levels may be overlooked.
4. On the hourly timeframe, trading signals from the MACD indicator should be executed only when volatility is good, and a trend is confirmed by a trend line or channel.
5. If two levels are too close together (5 to 20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the correct direction, a Stop Loss should be set at breakeven.

What's on the Charts:

Price levels (areas) of support and resistance are targets when opening long or short positions or sources of signals.

Red lines indicate channels or trend lines that display the current trend and indicate the preferred direction for trading.

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

Important speeches and reports (contained in the news calendar) can significantly impact the movement of the currency pair. Therefore, during their release, trading should be conducted with maximum caution, or one should exit the market to avoid sharp reversals against preceding movements.

Beginners trading in the forex market 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.