Analysis of Macroeconomic Reports:

A considerable number of macroeconomic events are scheduled for Wednesday. All of them are Purchasing Managers' Index (PMI) reports for April in the services and manufacturing sectors. The indices will be published across many European countries, including the Eurozone as a whole, the UK, and the US. In Europe, a slowdown in business activity is expected, unlikely to please the bulls. At the same time, Donald Trump continues to dominate the market sentiment. Macroeconomic data rarely reflect price movements and cannot significantly influence traders' moods. A decline in PMIs in Europe and the UK may trigger a continued drop in the euro and the pound.

Analysis of Fundamental Events:

As before, there is no point in discussing any fundamental events other than Trump's trade war. The fall of the dollar can continue indefinitely as long as Trump keeps imposing new tariffs or raising existing ones. We would advise traders to closely follow speeches from top officials of the world's largest countries and economic alliances regarding tariffs. Any escalation could lead to a new drop in the dollar. Any sign of de-escalation would likely strengthen the dollar. However, there have been no signs of de-escalation, and the dollar could still fall without new developments.

Yesterday, Trump announced that he does not intend to maintain trade tariffs on China at the 145% level, which sparked a wave of relief across all markets. Bitcoin, the US dollar, and US stock indices immediately moved higher. However, Trump did not clarify when or under what conditions the tariffs would be lowered. And if a trade deal with China fails to materialize, the White House is unlikely to de-escalate the conflict. Then again, with Trump, nothing can be ruled out.

General Conclusions:

Both currency pairs may move in either direction during the third trading day of the week. On Tuesday, we saw the US dollar strengthen, which could continue into the first half of Wednesday, as the market has not yet fully digested Trump's latest statements. Additionally, pressure on the euro and pound may come from April's business activity indices, which are expected to show a slowdown.

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.