Overview of macroeconomic reports

We can highlight three economic reports on Thursday. In Germany, the inflation report for June (preliminary estimate) will be published, which is often the most important as it can surprise the market if the latest results significantly deviate from forecasts. Moreover, inflation is expected to rise from 6.1% to 6.3-6.4%. This is already concerning, especially since the European Central Bank continues to be aggressive.

In the United States, the final GDP value for the first quarter will be published, and we expect minimal surprises. The economy is expected to grow by 1.3-1.4%, and the deviation from the forecast cannot be significant. Nevertheless, this is an important report, and you shouldn't overlook it. Furthermore, the US will release its report on unemployment claims for the latest week. This will only stir market reaction in the event of a significant deviation from the forecasted value.

Overview of fundamental events

There are also notable fundamental events on Thursday. Federal Reserve Chairman Jerome Powell will be speaking for the second time, making it his fifth appearance in the past two weeks. As we can see, he is still capable of surprising the market. He practically promised that the Fed will raise the rate two more times in 2023. Therefore, if he shows a hawkish stance again at the same forum in Sintra, the dollar may show further growth. Especially since it is a good time for the emergence of a new medium-term downtrend.

For the British pound, there will be a speech by Bank of England rep Silvana Tenreyro, but her speech is scheduled for the evening, so it is unlikely to have a significant impact on trading during the day.

Bottom line

A sufficient number of important events for today, which means that reversals are possible, and volatility may gradually increase throughout the day. Of course, you should pay close attention to Powell's speech, but we believe that the German inflation report can also be resonant enough to stir some market reaction.

Main rules of the trading system:

• The strength of the signal is calculated by the time it took to form the signal (bounce/drop or overcoming the level). The less time it took, the stronger the signal.
• If two or more trades were opened near a certain level due to false signals, all subsequent signals from this level should be ignored.
• In a flat market, any currency pair can generate a lot of false signals or not generate them at all. But in any case, as soon as the first signs of a flat market are detected, it is better to stop trading.
• Trades are opened in the time interval between the beginning of the European session and the middle of the American one when all trades must be closed manually.
• On the 30-minute timeframe, you can trade based on MACD signals only on the condition of good volatility and provided that a trend is confirmed by the trend line or a trend channel.
• If two levels are located too close to each other (from 5 to 15 points), they should be considered as an area of support or resistance.

Comments on charts

Support and resistance levels are levels that serve as targets when opening long or short positions. Take Profit orders can be placed around them.

Red lines are channels or trend lines that display the current trend and show which direction is preferable for trading now.

The MACD (14,22,3) indicator, both histogram and signal line, is an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (always found in the news calendar) can significantly influence the movement of a currency pair. Therefore, during their release, it is recommended to trade with utmost caution or to exit the market to avoid a sharp price reversal against the previous movement.

Beginners trading in the forex market should remember that not every trade can be profitable. Developing a clear strategy and money management is the key to success in trading over a long period of time.