Analysis of Macroeconomic Reports:

Several macroeconomic events are scheduled for Wednesday, although none are critically important. Germany will release its retail sales report, while the US will publish data on unemployment claims and changes in private sector employment (ADP report). While the ADP report is related to the US labor market and unemployment, market participants typically await the NonFarm Payrolls report before drawing conclusions about labor market conditions. Therefore, while a minor reaction to the ADP report is possible, it is unlikely to be significant. There is no notable macroeconomic news expected from the UK or the EU today.

Analysis of Fundamental Events:

Key events on Wednesday include a speech by Federal Reserve Governor Christopher Waller and the release of the minutes from the latest FOMC meeting. As mentioned earlier, Fed officials are not expected to provide new comments at this time. In recent weeks, there has been a lack of significant data releases in the US, and new information is needed to alter the central bank's stance. The FOMC minutes serve as a largely formal document, offering insight into the monetary policy committee's sentiment during the meeting. Notably, in December, most FOMC officials raised their rate expectations for 2025. Consequently, if the minutes trigger a reaction, it is more likely to strengthen the US dollar.

General Conclusions:

On the third trading day of the week, traders are likely to see further declines in both the euro and the pound sterling. Although both currencies attempted to rally, their efforts were overshadowed by the EU inflation report and strong ISM and JOLTs reports from the United States. As a result, it is probable that today will witness renewed declines in both currency pairs.

Key Rules for the Trading System:

1. Signal strength is determined by the time it takes for a signal to form (bounce or breakout of a level). The shorter the time, the stronger the signal.
2. If two or more false signals are generated near a level, subsequent signals from that level should be ignored.
3. In a flat market, any pair may produce numerous false signals or none at all. In such cases, it's better to stop trading at the first signs of consolidation.
4. Trades should be opened during the European session through the middle of the American session. All trades should be manually closed thereafter.
5. On the hourly timeframe, trades based on MACD signals should only be executed during periods of strong volatility and trends confirmed by trendlines or trend channels.
6. If two levels are very close (5–20 pips apart), they should be treated as a support or resistance zone.
7. After a 15–20 pip movement in the correct direction, set a Stop Loss at breakeven.

What's on the Charts:

Support and Resistance Levels: Targets for opening buy or sell orders. These are ideal points for setting Take Profit levels.

Red Lines: Trendlines or channels reflecting the current trend direction and indicating the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line serving as auxiliary indicators and sources of signals.

Key News Events and Reports: Always listed in the economic calendar, these can significantly impact currency pair movements. Exercise caution or exit the market during such events to avoid sharp price reversals.

Every trade cannot be profitable. The key to long-term success in Forex trading lies in developing a clear strategy and effective money management.