Review of economic calendar

The economic calendar is entirely empty on Monday. There is not a single report even of secondary importance. Thus, today we expect a drop in volatility and weak movements, possibly sideways trading. As recently both EUR/USD and GBP/USD have been trading quite chaotically, today there might be an upward move to offset the illogical Friday drop. Let's recall that the statistics from the US were not in favor of the American dollar, but it was the greenback that rose by the end of the day.

Review of fundamental events

Among the fundamental events of Monday, we can highlight the speeches of Christine Lagarde, Philip Lane, and Fabio Panetta. All three are representatives of the ECB's Monetary Committee. It goes without saying that the most important will be the speech of the ECB's chief, Christine Lagarde. You are certainly aware that in the last two months, market participants have been speculating that the European regulator might take a break in tightening this autumn. Such information has a "dovish" tone, which can put pressure on the single European currency. Therefore, if today Lagarde and her colleagues do not talk about the need to raise interest rates but about a pause or the intention to keep rates at elevated levels for as long as possible, the European currency might once again come under selling pressure.

Bottom line

On Monday, it makes sense to take notice of remarks by Christine Lagarde and her colleagues. This information will hardly be available immediately. That's why you should be braced for higher volatility and sharp price twists at that time.

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, 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.