Analysis of Macroeconomic Reports:

There are very few macroeconomic reports scheduled for Monday. The calendar lists only the US industrial production report for February. It is clear that the market will not even notice this report, as it has largely ignored unfavorable macroeconomic events for the US dollar in recent weeks. For example, on Friday, traders paid no attention to the second estimate of the US fourth-quarter GDP, which decreased from 1.4% to 0.7%. Geopolitics remains the primary focus for all markets. According to recent reports, the Bab-al-Mandab Strait may be blocked by Yemen in support of Iran. This is yet another important route for oil from the Middle East to the rest of the world...

Analysis of Fundamental Events:

There is practically nothing to highlight among Monday's fundamental events. However, the market's attention remains squarely on the Middle East and Donald Trump, rather than on central banks. In our view, the dollar can only be supported by geopolitics, which is precisely what is happening at the moment. Without a new, more severe escalation of the war in the Middle East, it will be difficult for the dollar to continue its rise, but without de-escalation of the conflict, there are also no grounds for its decline. Currently, there is no sign of de-escalation in the conflict.

General Conclusions:

During the first trading day of the week, absolutely any movements may be observed in the market, as the trajectory of events in the Middle East can turn in any direction at any moment. The euro can be traded today from the area of 1.1455-1.1474, while the British pound can be traded from the area of 1.3259-1.3267. We still do not see grounds for strong and sustained growth in the US currency (considering all factors, not just geopolitics), but the war in the Middle East may continue to support the dollar several times over.

Key Principles of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (bounce or breakout). The less time taken, the stronger the signal.
2. If two or more trades have been 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 can form many false signals or none at all. In any case, at the first signs of a flat trend, it is best to stop trading.
4. Trading deals are to be opened during the period between the start of the European session and the mid-American session, after which all trades should be closed manually.
5. On the hourly timeframe, it is preferable to trade based on signals from the MACD indicator only when there is good volatility and a trend confirmed by a trend line or trend channel.
6. If two levels are positioned too close together (5-20 pips apart), they should be considered a support or resistance area.
7. Upon moving 15-20 pips in the correct direction, a Stop Loss should be set to breakeven.

What to Look for on the Charts:

Price levels of support and resistance are levels that serve as targets when opening buys or sells. Take Profit levels can be placed around them.

Red lines represent channels or trend lines that show the current trend and indicate the direction in which it is preferable to trade now.

The MACD indicator (14,22,3) – the histogram and the signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (always included in the news calendar) can significantly affect the movement of the currency pair. Therefore, during their release, trading should be done with utmost caution, or traders should exit the market to avoid sharp price reversals against the previous movement.

Beginning traders in the forex market should remember that not every trade can be profitable. Developing a clear strategy and effective money management are the keys to long-term trading success.