Overview of macroeconomic reports

There will be quite a few macroeconomic events on Thursday. Let's start with the most important ones, especially since there aren't much. The Consumer Price Index in the European Union for August. We don't need to mention how important the inflation indicator is at the moment. Despite the fact that the European Central Bank is confidently heading towards a pause in its monetary tightening cycle, this doesn't guarantee that it will definitely pause in its next meeting. A soft decline in inflation or its absence will provoke the central bank to raise rates more aggressively and higher. Or, at the very least, the market will believe so. Hence, a slight drop in EU inflation (5.2% in August and above) may support the euro, while a steeper drop (5.0% and below) will trigger a euro decline.

Germany will release secondary market reports on unemployment and retail sales. We don't think they can provoke a reaction of more than 20 pips. In the US, we can expect reports on personal income and expenditure of the American population, the Personal Consumption Expenditures price index, and unemployment benefit claims. Individually, they're unlikely to have a significant impact on the dollar, but collectively they might.

Overview of fundamental events

Among the fundamental events for Thursday, we can highlight speeches by Huw Pill (Bank of England), Isabel Schnabel (ECB), and Luis de Guindos (ECB). The last two speeches will be quite significant since the market is currently leaning more towards no rate hike in September. If Schnabel and de Guindos dispel these expectations, then the euro might continue its upward trajectory.

Bottom line

On Thursday, we can look forward to significant reports and speeches. A heads-up: since there will be numerous events, the currency pair may change its direction multiple times throughout the day. These shifts are impossible to predict in advance, just like the report values and the rhetoric of the officials speaking, so be prepared. The EU inflation report will be of key importance.

Main rules of the trading system:

• The strength of the signal is calculated by the time it took to form the signal (bounce/drop or overcoming the level). The less time it took, the stronger the signal.
• If two or more trades were opened near a certain level due to false signals, all subsequent signals from this level should be ignored.
• In a flat market, any currency pair can generate a lot of false signals or not generate them at all. But in any case, as soon as the first signs of a flat market are detected, it is better to stop trading.
• Trades are opened in the time interval between the beginning of the European session and the middle of the American one when all trades must be closed manually.
• On the 30-minute timeframe, you can trade based on MACD signals only on the condition of good volatility and provided that a trend is confirmed by the trend line or a trend channel.
• If two levels are located too close to each other (from 5 to 15 points), they should be considered as an area of support or resistance.

Comments on charts

Support and resistance levels are levels that serve as targets when opening long or short positions. Take Profit orders can be placed around them.

Red lines are channels or trend lines that display the current trend and show which direction is preferable for trading now.

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

Important speeches and reports (always found in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it is recommended to trade with utmost caution or to exit the market to avoid a sharp price reversal against the previous movement.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and money management is the key to success in trading over a long period of time.