Analysis of macroeconomic reports:

Very few macro releases are scheduled for Thursday, and none stand out. Germany will publish trade-balance, import and export data, and the US will release weekly initial jobless claims. All of these reports are strictly secondary and unlikely to move the market even 15 pips. Therefore, we should expect technical trading again today. The euro remains in a downtrend, while the British pound has traded in a sideways channel for the past two weeks.

Analysis of fundamental events:

Thursday's key events include speeches by European Central Bank Chief Economist Philip Lane and Federal Reserve FOMC voter Alberto Musalem. Lane may harden his rhetoric on key rates because eurozone inflation accelerated strongly to 3.8% in September — nearly double the ECB's target. However, a more hawkish tone and the prospect of a third ECB hike this year are unlikely to help the euro, since the market has already ignored ECB tightening twice. The single currency fails to rally on both rising ECB hawkishness and any softening of Fed hawkishness.

The geopolitical backdrop still leaves much to be desired. The US and Iran are not conducting official talks at present, while Donald Trump keeps saying a deal could be signed after the US Congressional elections. Trump also repeatedly claims the Russia-Ukraine conflict could end very soon — a refrain he has used for nearly two years — so the market gives such statements little credence. Recent headlines note Yemen has launched a military operation against the Houthis, and the Houthis continue to strike Saudi energy infrastructure and tankers. Thus tensions in the Middle East are heating up, contrary to the US president's statements.

General conclusions:

On the penultimate trading day of the week, currency pairs could calmly show further declines, since the move no longer depends on fundamentals, geopolitics, or macroeconomics. The euro can be traded today from the 1.1198–1.1218 area, and the pound sterling from the 1.3175–1.3180 area. Volatility today may be low.

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, a stop-loss should be set 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.