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There are extremely few macroeconomic publications scheduled for Wednesday. To be more precise, just one. Much has already been said about the US inflation report, and the market refuses to move until it understands how much US inflation slowed or accelerated in July. In our view, this information will not help traders draw conclusions about the Federal Reserve's decision in September because, first, the chances of policy tightening are minimal in any case, given the disappointing Nonfarm Payrolls report. And second, US inflation may slow in July but rise in August.
There is absolutely nothing to note among Wednesday's fundamental events. Not a single speech by a central bank representative. However, speeches by central banks' officials are not needed right now. After Friday's Nonfarm report, it became clear — one should not expect a Fed rate hike in September. We also believe the Fed will not raise the key rate at all in 2026, but this conclusion is not highly probable, since the situation in the Middle East can change frequently.
As for the European Central Bank and the Bank of England, they may raise rates, but everything will depend on inflation readings. Inflation may accelerate by the end of August because oil prices are rising again and once more heading toward $100 per barrel.
The geopolitical background continues to leave much to be desired. The US and Iran continue to exchange strikes regularly; negotiations are not underway at this time; the Strait of Hormuz remains closed or partially closed, Yemeni Houthis maintain a blockade of Saudi Arabia; and Tehran threatens to fully close the Bab-el-Mandeb Strait if Washington again attempts to exert pressure. The market does not believe Donald Trump's statements, and Iran now prefers to negotiate with Oman rather than with the US. However, any agreements between Muscat and Tehran are meaningless if the US maintains a blockade of the strait. In that case, Iran will also maintain its blockade.
During the third trading day of the week, currency pairs may trade more actively than at the start of the week, when there were practically no movements. The euro can be traded today from the 1.1527–1.1531 area, and the pound sterling from the 1.3456–1.3476 area. The US inflation report may significantly affect market activity today.
Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.
Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.
The MACD indicator (14,22,3) – histogram and signal line – is a supporting indicator that can also be used as a source of signals.
Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.
Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.
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