Analysis of Macroeconomic Reports:

There are no macroeconomic reports scheduled for Monday, except for a third-tier producer price index in Germany. However, the market continues to respond rather coolly to any macroeconomic data. Over the past two months, almost all important reports have been ignored. Whereas previously the market bought the dollar solely on the back of the war in the Middle East and a flight from risk, in the last two weeks, it has sold the dollar amid the de-escalation of the conflict. However, this de-escalation could turn back into escalation as early as this week.

Analysis of Fundamental Events:

The key event on Monday is the speech by European Central Bank President Christine Lagarde. However, the market continues to ignore central bank monetary policy factors. Therefore, statements from representatives of the ECB, Federal Reserve, and Bank of England are not particularly significant at this time. The Fed is not expected to tighten monetary policy in 2026, while the BoE and the ECB may raise key rates amid rising inflation. However, the geopolitical backdrop is changing almost daily, which means central banks may not rush to make important monetary policy decisions. For example, this week, the war in the Middle East could very well resume if an agreement between Iran and the US is not signed. Thus, the ECB and the BoE may extend their pause into April.

General Conclusions:

During the first 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.