Review of Macroeconomic Releases:

Few macroeconomic publications are scheduled for Friday. German producer-price data, UK retail sales, and US industrial production are due. In our view, retail sales and industrial production may provoke only a small market reaction. Over the past week, the market has focused almost exclusively on Federal Reserve monetary policy and has been buying the dollar on any pretext. Therefore, the above releases are unlikely to provide strong support for the euro or the pound. More likely, European currencies may strengthen only on corrective moves.

Review of Fundamental Events:

Among Friday's fundamental events, the only one of note is European Central Bank President Christine Lagarde's speech. It is hard to say what new information she can offer, given that the ECB met just last week. The ECB has tightened policy for the second time this year and signaled readiness to tighten further if inflation accelerates. Yet the market barely noticed — the Fed is the only central bank raising rates now, and has done so repeatedly over the past months judging by market reactions.

The geopolitical backdrop remains unfavorable. The US and Iran are not negotiating; the Strait of Hormuz remains closed or partially closed; Iran-backed Houthi forces maintain a blockade of Saudi Arabia and continue attacking its facilities. Donald Trump has proposed an unprecedented economic operation to "destroy" Iran and threatens sanctions on any countries that interact with it. So far, no one has supported Trump's plan, and it remains unclear whether it will be implemented. The conflict persists, the Bab al-Mandeb Strait is under threat of blockade, and oil prices remain high.

General Conclusions:

During the last trading day of the week, currency pairs will likely try to correct. The euro can be traded today from the 1.1461–1.1474 area, and the pound from the 1.3319–1.3331 and 1.3380–1.3386 areas. Volatility may be low again today since no major events are scheduled.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and practicing money management are key to long-term success in trading.