Analysis of Macroeconomic Reports:

There are a few scheduled macroeconomic events for Wednesday, but several important reports will be released. The most significant one is the UK Consumer Price Index (CPI) for January. Traders expect that inflation in the UK will rise to 2.8% year-on-year, with core inflation projected to jump to 3.7%. It is likely that the recent rally in the British currency was driven by these expectations. If the actual figures are lower than anticipated, the British pound could start to decline as early as today. In the U.S., reports on building permits and housing starts are set to be published; however, these are considered secondary indicators.

Analysis of Fundamental Events:

The most significant event on Wednesday is the release of the FOMC meeting minutes. However, we often emphasize that this event is largely formal and tends to attract attention without offering much new information. The minutes typically do not reveal any groundbreaking insights, especially since the monetary committee did not make any major decisions at the last meeting. Therefore, it is unlikely that the Federal Reserve will provide any surprises this evening. The overall stance of the Fed remains hawkish for 2025, which keeps the U.S. dollar in a much stronger position compared to the euro and the pound.

General Conclusions:

On the third trading day of the week, market sentiment may be impacted by the UK inflation report, which could lead to significant movements depending on how the actual figures compare to expectations. Consequently, the GBP/USD pair could experience increased volatility throughout the day. However, overall market conditions are unlikely to change significantly. Both the EUR/USD and GBP/USD pairs seem to be leaning towards growth, but this growth appears to be more of a correction on the daily timeframe.

Key Rules for the Trading System:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15–20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.