Macroeconomic reports review:

Only a few macroeconomic releases are scheduled for Thursday. Essentially, the only noteworthy item is the U.S. initial jobless claims report, which is unlikely to attract traders' attention. In the EU, Germany and the UK, the economic calendar is empty. Thus, volatility in both currency pairs may again be low today. The euro is unlikely to show gains without significant news support, and the British pound's rise may stall.

Fundamental events analysis:

The only fundamental event of Thursday worth noting is a speech by Bank of England Governor Andrew Bailey; however, after yesterday's inflation report, traders already have a clear idea of what to expect from the central bank chief. At the next meeting, the BoE's Monetary Policy Committee will most likely vote for a rate hike, marking the start of a tightening cycle. The European Central Bank and the Federal Reserve may pause in October.

The geopolitical backdrop remains poor. The United States and Iran are not conducting official talks at the moment, although Donald Trump continues to insist a deal could be signed after the U.S. congressional elections. At the same time, Trump repeatedly says the conflict between Ukraine and Russia could end imminently — statements he has been making for nearly two years — so the market places little faith in such rosy outcomes. No one is certain either conflict will be resolved before year-end. Trump seeks to end the war in Ukraine but cannot resolve his own dispute with Iran. Iran, for its part, counts on Republican losses in Congress, which could reduce U.S. pressure. Oil prices are rising again.

Conclusions

On the penultimate trading day of the week, currency pairs may trade sluggishly, as there are few important events today. The euro can trade in the 1.1198–1.1218 area, and the pound in the 1.3380–1.3386 area, but strong moves are unlikely today.

Key Rules of the Trading System:

1. The strength of a signal is determined by the time it takes to form the signal (rebound or breakout). The less time taken, the stronger the signal.
2. If two or more trades were opened at a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a range (flat), any pair can generate many false signals or may not produce any at all. Technical levels may be disregarded.
4. On the hourly timeframe, trading signals from the MACD indicator should be acted upon only when volatility is high, and a trend line or trend channel confirms the trend.
5. If two levels are too close together (within 5-20 pips), treat them as a support or resistance area.
6. After moving 15 pips in the right direction, set a stop-loss to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance serve as targets for opening buy or sell trades or as sources of signals.

Red lines indicate channels or trend lines that show the current trend and the preferred trading direction.

The MACD indicator (14,22,3) — the histogram and signal line — is an auxiliary indicator that can also provide signals.

Important speeches and reports (listed in the news calendar) can significantly influence currency pair movements. Therefore, during their release, traders should approach trading with utmost caution, or exit the market to avoid sudden reversals against the preceding move.

Beginner forex traders 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.