Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Wednesday, but the sole event of the day could trigger significant market volatility. Recall that inflation in the U.S. has accelerated in recent months to 3.8%, and it may rise to 4.2% by the end of May. Thus, high inflation and the recovery of the U.S. labor market in 2026 could trigger a tightening of the Federal Reserve's monetary policy. Moreover, this could happen not at the end of the year as many currently expect, but much earlier. The Fed meeting will take place next week, and we will see how the Fed, under Kevin Warsh, plans to respond to the rapidly rising inflation. In the UK, Germany, and the EU, today's event calendars are empty.

Analysis of Fundamental Events:

There is absolutely nothing significant among the fundamental events for Wednesday. The European Central Bank meeting will take place on Thursday, while the meetings of the Fed and the Bank of England are scheduled for next week. Therefore, representatives of the central banks cannot comment on monetary policy at this time. They are in a "quiet period." The ECB is highly likely to raise rates this week, but the European currency currently cannot extract any dividends from this.

The geopolitical backdrop continues to be unsatisfactory, as Iran and the U.S. have once again moved closer to resuming conflict and failing negotiations. Talks between Washington and Tehran are ongoing, and according to the U.S. president, they are "very successful." However, there have been no confirmations from Iran regarding the success of diplomacy. Quite the opposite. The parties regularly violate ceasefire conditions, and Iran consistently refutes Trump's peacemaking rhetoric. The new week has begun with new mutual shelling in the Middle East and the downing of an American helicopter over the Strait of Hormuz. Judge for yourself how close Tehran and Washington are to a peace agreement...

General Conclusions:

During the third trading day of the week, both currency pairs may trade relatively actively, as important geopolitical news may emerge today, and the U.S. inflation report will be published. The euro can be traded today from the area of 1.1527-1.1531, while the British pound can be traded from the area of 1.3380-1.3386. Geopolitics remains a key influencing factor in the currency market.

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 keys to success in trading over the long term.