17.07.202605:38 Forex Analysis & Reviews: What to Focus on July 17? Analysis of Fundamental Events for Beginners

Overview of Macroeconomic Reports:

There are a few macroeconomic publications scheduled for Friday, and none are significant. In the European Union, the second estimate of inflation for June will be released today and is unlikely to differ from the first estimate. In the United Kingdom, the macroeconomic calendar is empty today. In the U.S., reports on new housing starts, building permits, and the consumer sentiment index from the University of Michigan will be released. Of all the reports mentioned, we can highlight only the consumer sentiment index, as it may provoke a market reaction if the actual value deviates from the forecast.

Analysis of Fundamental Events:

There is nothing noteworthy among the fundamental events on Friday. Recent speeches by Federal Open Market Committee (FOMC) representatives indicated a softening of the American central bank's hawkish stance, at least for the next two meetings. Inflation in the U.S. has slowed from 4.2% to 3.5%, raising hopes for further declines without Federal Reserve intervention. In the coming months, the Fed is unlikely to rush into raising the key rate. In this case, the dollar loses yet another source of support. However, inflation and Fed decisions will remain dependent on oil prices and the conflict in the Middle East.

The geopolitical backdrop remains stably "conditionally positive." Iran and the U.S. have signed an agreement; however, too many important questions remain unresolved. In particular, the "nuclear question," 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 this is clearly insufficient for the dollar to begin rising actively again. After all, Tehran and Washington have not fully exited the negotiation process. Recent events in the Middle East demonstrate the fragility of any ceasefires between the U.S. and Iran. The Strait of Hormuz is currently again under blockade.

General Conclusions:

During the last trading day of the week, both currency pairs may move very sluggishly, as no significant events are expected today. The euro can be traded from the area of 1.1461-1.1466, while the British pound can be traded from the area of 1.3456-1.3476. The euro has not shown a significant rise and appears inclined towards a new decline, while the British pound has been in an upward trend for three weeks but may continue to correct 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.