22.07.202606:31 Forex Analysis & Reviews: What to Pay Attention to on July 22? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are very few macroeconomic publications scheduled for Wednesday. Essentially, the only notable report is on inflation in the United Kingdom, which may have already been factored in by the market. Recall that the British pound has been declining over the past few days, and the market expects a slowdown in inflation. A decrease in inflation would mean that the Bank of England has even fewer reasons to tighten monetary policy. Therefore, the market may have already considered this factor. There are no significant publications scheduled today in Germany, the US, or the Eurozone.

Analysis of Fundamental Events:

There is absolutely nothing to highlight among the fundamental events on Wednesday. The European Central Bank meeting is set for Thursday, and the meetings of the Bank of England and the Federal Reserve will take place next week. As such, representatives of the monetary committees cannot currently comment on the economy or key rates.

The geopolitical backdrop is again changing in an unfavorable direction. Another truce has been broken, and the United States and Iran have resumed hostilities. No negotiations are currently underway. Donald Trump is preparing for new strikes against Iran, while Tehran is ready to respond at any moment by blocking the Bab-el-Mandeb Strait. Yesterday, the Yemeni Houthis announced a blockade of Saudi Arabia, likely implying a blockade of the Red Sea. The situation is only heating up, which is provoking a new rise in oil prices.

General Conclusions:

During the third trading day of the week, the euro may trade rather sluggishly again, while the British pound is likely to be characteristically active. The euro can be traded from the area of 1.1363-1.1377, while the British pound can be traded from the area of 1.3380-1.3386. The euro remains within the horizontal channel, while the British pound has risen for three weeks and has now begun a new downward trend.

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 key to long-term success in trading.