01.07.202507:13 Forex Analysis & Reviews: What to Pay Attention to on July 1? A Breakdown of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are several macroeconomic reports scheduled for release on Tuesday. Attention should first focus on the Eurozone's Consumer Price Index (CPI) and the ISM Manufacturing Index in the United States. Inflation in Germany slowed to 2% yesterday, so it's unlikely that inflation in the Eurozone will accelerate today. As a result, the European Central Bank (ECB) may continue to ease its monetary policy in 2025. However, this factor has no impact on the euro exchange rate, which we've mentioned many times. The ISM Manufacturing Index in the U.S. is important on its own, but what kind of support could it provide to the dollar? A 50-pip boost? What would that influence?

Analysis of Fundamental Events:

Among Tuesday's fundamental events, the speeches by Christine Lagarde and Jerome Powell are noteworthy. These are potentially very important events, but we'd like to remind readers that there are currently no outstanding questions regarding the monetary policy of the ECB or the Federal Reserve. Both central bank meetings took place very recently, so the two central banks have already provided all relevant information. It's also worth recalling that last week, both Powell and Lagarde spoke several times—without saying anything significant.

For the market, the trade war remains the most important issue, and there are still no signs of resolution or progress. The situation may escalate to its limit soon, as Donald Trump has not signed a single trade agreement (except with the UK). The deal with China is not being counted for now, as the details remain unclear. So far, Trump's version of a "truce" means keeping all tariffs in place.

Conclusions:

On the second trading day of the week, both currency pairs may continue rising as the Middle East war has ended, the Global Trade War is ongoing, and Trump continues making decisions that offer no grounds for a bright outlook in the U.S. In the near future, Trump may well raise tariffs for many countries since there is still no sign of any new trade agreements. We've also already established that trade deals do not imply the removal of U.S. import tariffs.

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.