31.07.202606:03 Analisis Forex & Kajian: What to Pay Attention to on July 31? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Friday. In the UK, there are no interesting events today. At the same time, the Eurozone will release an important inflation report, and the US will only publish the second estimate of the University of Michigan's Consumer Sentiment Index. Thus, traders should focus on the Eurozone's inflation data. Yesterday, Germany's consumer price index exceeded forecasts, and the same could happen to the European index today. If inflation exceeds expectations, it could support the euro for the third consecutive day, as this would significantly increase the likelihood of the European Central Bank tightening its monetary policy in September.

Analysis of Fundamental Events:

There are absolutely no significant events to note on Friday. No important speeches or events are scheduled for today. However, traders have plenty to ponder. Recall that inflation data from Germany was released yesterday, and inflation for the Eurozone will be released today. These two reports will allow for a more or less accurate forecast for the ECB meeting in September. As for the Bank of England and the Federal Reserve, we believe the BoE is more likely to tighten policy, while the Fed will continue to take a wait-and-see approach. Thus, the euro and the pound have an advantage over the dollar both now and previously. Technical, fundamental, and macroeconomic factors support this.

The geopolitical backdrop continues to leave much to be desired. Another ceasefire has been broken, the conflict has resumed, and the US and Iran have been exchanging heavy blows for two weeks, with no negotiations currently taking place. The Strait of Hormuz remains closed, the Yemeni Houthis have announced a blockade of Saudi Arabia, and Tehran threatens to close the Bab-el-Mandeb Strait completely. The situation is escalating over time, which drives up oil prices.

General Conclusions:

On the last trading day of the week, the European currency may continue to rise if the EU inflation report exceeds expectations. The British pound may begin a correction. 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 1.3456-1.3476. Volatility for both currency pairs may decrease today.

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 line or channel confirms a trend.
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.