14.07.202606:50 Forex Analysis & Reviews: What to Pay Attention to on July 14? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

Only one macroeconomic report is scheduled for Tuesday—the U.S. Consumer Price Index (CPI). However, this publication is significant, at least for the time being. If inflation in America begins to slow on its own, the Federal Reserve may not need to tighten monetary policy. However, in light of recent events in the Middle East, oil prices are rising again, so inflation under these circumstances is unlikely to slow down significantly or for long. Nonetheless, it may decrease to 3.8% in June, which could relieve some pressure for a while.

Analysis of Fundamental Events:

Among the fundamental events on Tuesday are the speeches from Bank of England Governor Andrew Bailey and Fed Chair Kevin Warsh. Of course, the market's primary focus will be on Warsh's speech in the U.S. Congress. If Warsh confirms readiness to raise the key interest rate, the dollar may strengthen. However, we do not believe that the Fed Chair will openly announce a readiness to tighten policy. Most likely, he will again highlight the issue of high inflation and express the regulator's concern regarding it. Without extreme necessity, Warsh will not promise a rate hike. As for Andrew Bailey, no important statements are expected, as the Bank of England adopted a fully wait-and-see position at the last meeting.

The geopolitical backdrop remains consistently "conditionally positive." Iran and the U.S. signed an agreement remotely; however, too many important questions remain unresolved. In particular, the "nuclear issue," the war between Lebanon and Israel, and the status of the Strait of Hormuz. Theoretically, the market may fear a resumption of full-scale war, but that is clearly not enough for the dollar to begin rising actively again. After all, Tehran and Washington have not completely exited the negotiation process. However, recent events in the Middle East demonstrate the fragility of any ceasefires between the U.S. and Iran. Negotiations and deals could fall apart at any moment.

General Conclusions:

On the second trading day of the week, both currency pairs may trade more actively than over the past 9 days. The euro can be traded from the area of 1.1354-1.1363, while the British pound can be traded from the areas of 1.3380-1.3386 and 1.3319-1.3331. Both currency pairs have turned downward in recent days.

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.