28.07.202605:39 Forex Analysis & Reviews: What to Watch Out For on July 28? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are very few macroeconomic publications scheduled for Tuesday, and none of them are significant. In the US, reports on consumer confidence and changes in private sector employment by ADP will be released today. Neither report is even secondary; it is tertiary. The ADP report is far from being the most accurate indicator, even in monthly terms, and is usually ignored by the market. The weekly report is simply a formality. In Germany, the Eurozone, and the UK, the event calendar is empty today.

Analysis of Fundamental Events:

There is also nothing of note among the fundamental events on Tuesday. This week, meetings of the Bank of England and the Federal Reserve will take place, so no representatives from the Monetary Committees can currently provide comments on the economy or policy. The European Central Bank meeting and its results from last week were once again overlooked, as they suggested a rise in the European currency. Neither the BoE nor the Fed intends to change key rates this month, but the market can interpret the results of their meetings in any way it wants. The dollar feels perfectly fine in comparison to the euro, so the Fed meeting is particularly risky for the European currency. The British pound shows greater resilience against the dollar, so markets may see the results that truly matter on Wednesday evening and Thursday afternoon, rather than those they hope to see.

The geopolitical backdrop continues to change in an undesirable direction. Another ceasefire has been broken, the US and Iran conducted heavy bombardments for two weeks, and negotiations are currently not taking place. The Strait of Hormuz remains closed, and Yemeni Houthis have announced a blockade of Saudi Arabia, likely anticipating a blockade of the Red Sea. The situation is only intensifying over time, provoking a new rise in oil prices.

General Conclusions:

During the second trading day of the week, the European currency may continue to move within the sideways channel of 1.1366-1.1474 towards its upper boundary, while the British pound may attempt to start a new upward trend. The euro can be traded today from the area of 1.1366-1.1377, while the pound can be traded from the areas of 1.3259-1.3267 and 1.3319-1.3331. Volatility for both currency pairs may again be low.

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.