Analysis of macroeconomic reports:

No macroeconomic publications are scheduled for Monday. Thus, during the day, no economic information will become available to traders. There will be nothing for traders to react to, and volatility may be low today. However, this week the second report important for Federal Reserve monetary policy will be published — the US inflation report. This report can also provoke a strong market reaction and could ultimately nullify the Fed's monetary tightening in September.

Analysis of fundamental events:

There is absolutely nothing to note among Monday's fundamental events either. Not a single speech will take place during the day. However, speeches by central bank officials are not needed at this time. After Friday's Nonfarm report, it became clear that expecting a key rate hike by the Fed in September is not warranted. We also believe the Fed will not raise the key rate at all in 2026, but this conclusion is not highly probable, since the situation in the Middle East could change ten more times.

The geopolitical backdrop continues to leave much to be desired. The US and Iran continue to exchange strikes regularly, negotiations are not currently taking place, the Strait of Hormuz remains closed or partially closed, Yemeni Houthis maintain a blockade of Saudi Arabia, and Tehran threatens to close the Bab-el-Mandeb Strait completely should Washington again try to put pressure on it. The market does not believe Donald Trump's statements, and Iran now prefers to conduct negotiations with Oman rather than the US. However, any agreements between Muscat and Tehran make no sense if the US maintains a blockade of the strait. In that case, Iran will also maintain its blockade.

General conclusions:

During the first trading day of the week, currency pairs may show very volatile moves, but only during the American trading session. The euro can be traded today from the 1.1527–1.1531 area, and the pound sterling from the 1.3456–1.3476 area. Volatility of both pairs may be weak today.

Main Rules of the Trading System:

1. The strength of the signal is assessed by the time it took to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. Technical levels may be disregarded.
4. When trading based on MACD signals on the hourly timeframe, it is advisable to do so only when volatility is high and a trend line or channel supports the trend.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

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

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.