Macroeconomic reports review:

Many macro releases are scheduled for Thursday, and most are fairly important. Notably, the U.S. Q3 GDP report is due, and consensus is relatively high—around 3.2%. The actual print may differ, up or down, but forecasts are optimistic. In the U.S., the core PCE price index will also be released; the Federal Reserve's preferred inflation gauge is expected to tick up slightly to about 3.1% year-on-year for September. That said, in our view, the PCE has become less market-moving this week because the Fed met yesterday: a December hike is already priced in, and markets even anticipate another hike in March. Higher inflation is no longer a surprise, and the dollar has been rising for two months regardless.

Fundamental events analysis:

The key fundamental event on Thursday is the European Central Bank meeting and Christine Lagarde's remarks. Markets effectively ignored the Fed decision and Kevin Warsh's comments yesterday — though it's still early. We think there were reasons for stronger moves yesterday if Warsh had leaned even more hawkish, but traders had already priced in most hawkish scenarios. Today the ECB can take any tone, and in practice it may not change the euro's trajectory: the euro has been falling for two months with almost no corrective bounce. The decline will end only when the market decides it has ended. Two prior ECB tightenings passed largely unnoticed.

The geopolitical backdrop remains poor. The U.S. and Iran are not in official talks, and Donald Trump still insists a deal could be struck — the question is when. Reports suggest the U.S. and Israel could resume strikes on Iran after the U.S. midterms if no agreement is reached; we find that scenario more plausible than a ceasefire. Iran, in turn, remains ready to strike U.S. allies in the region. In addition, mass unrest continues in many European countries, which is not supportive of the euro.

Key takeaways:

Volatility may be elevated on the penultimate trading day of the week because of major U.S. macro releases and the ECB meeting. Trade EUR/USD from the 1.1132–1.1140 area and GBP/USD from the 1.3319–1.3331 area. From our perspective, both the euro and the pound should have upside potential — though market behavior may remain unpredictable.

Key Rules of the Trading System:

1. 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.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. 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.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, set a stop-loss 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.