16.07.202605:34 Forex Analysis & Reviews: What to Focus on July 16? Analysis of Fundamental Events for Beginners

Overview of Macroeconomic Reports:

There are several macroeconomic publications scheduled for Thursday, but none are truly significant. In the U.K., data on GDP and industrial production for May will be released, which generally do not generate much excitement among traders. Additionally, the GDP report will be released monthly rather than quarterly or annually. In the U.S., reports on unemployment claims and retail sales will be published. The most important report among these is the retail sales data. In the European Union, the calendar of macroeconomic events is empty today.

Analysis of Fundamental Events:

Among the fundamental events on Thursday are the speeches by Federal Reserve representatives Philip Jefferson and Lorie Logan. However, it is notable that over the past two days, there have been two speeches by Fed Chair Kevin Warsh before the U.S. Congress. Thus, all information that could impact markets has already been released. Warsh stated that reducing inflation remains the central bank's main task, but he did not specify how the Fed intends to achieve this. In our view, the situation is not as clear-cut as it may seem. The decrease in inflation for June reduces the likelihood of the Fed tightening monetary policy in July and September.

The geopolitical backdrop remains stably "conditionally positive." Iran and the U.S. have signed an agreement; however, many important questions remain unresolved. Specifically, the "nuclear issue," the war between Lebanon and Israel, and the status of the Strait of Hormuz. Theoretically, the market may be concerned about the resumption of full-scale war, but this is clearly insufficient for the dollar to start rising actively again. After all, Tehran and Washington have not fully exited the negotiation process. However, 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 penultimate trading day of the week, both currency pairs may move very sluggishly, as no significant events are expected today. The euro can be traded around the area of 1.1461-1.1466, while the British pound can be traded around the areas of 1.3456-1.3476 and 1.3587-1.3598. The euro has left the sideways channel, while the British pound continues its three-week growth.

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.