Analysis of Macroeconomic Reports:

Very few macroeconomic publications are scheduled for Tuesday. Essentially, the only item novice traders should note is the US JOLTS report on job openings. However, even this report will likely be ignored with about a 90% probability. It is worth recalling that the JOLTS report contains two-month-old data. Any unemployment report (the next of which is due on Friday) is much more timely and reflects the overall state of the US labor market rather than just one component. Therefore, we do not expect any reaction to JOLTs, and today and tomorrow the US elections will be the top priority for traders.

Fundamental Events Breakdown:

Among Tuesday's fundamental events, several speeches by European Central Bank representatives are scheduled, but as we noted earlier, the ECB has no pressing monetary-policy questions right now. It is obvious to all traders that the ECB will continue to tighten policy given current inflation, which does not materially help the euro because the currency remains at the bottom against the dollar. The two previous rate hikes in the euro area did not help the euro. Therefore, statements by ECB officials carry virtually no weight under current circumstances.

The geopolitical backdrop remains unfavorable. The US and Iran are not conducting official talks at this time, although Donald Trump continues to insist that a deal could be agreed. Immediately after the congressional elections, the US and Israel could resume strikes on Iran, since the probability of a deal with Tehran stubbornly approaches zero. Iran, in turn, is ready to resume strikes on US allies in the region and even on US military bases outside the Middle East. In addition, mass unrest continues in many European countries, which hardly adds optimism for the euro. These two factors can support the dollar, but the dollar rises against the euro regardless, while these factors do not matter against the pound.

Overall Conclusions:

During the second trading day of the week, market volatility may be fairly low because no important events are scheduled for today, and the US election results will become known Wednesday night or Thursday morning. We expect the euro to continue rising within its sideways channel and the pound to continue its upward trend. The euro can be traded today from 1.1198–1.1218, and the pound sterling from 1.3380–1.3386.

Main rules of the trading system:

1. Signal strength is judged by how long the signal took to form (a bounce or a breakout). The less time required, the stronger the signal.
2. If two or more false signals have been generated around a given level, all subsequent signals from that level should be ignored.
3. In a flat (range), any pair can produce many false signals or none at all. Technical levels can be ignored.
4. On the hourly timeframe, ideally trade MACD signals only when volatility is strong, and a trendline or trend channel confirms the trend.
5. If two levels are placed very close to each other (5–20 pips), treat them as a support/resistance area.
6. After a price moves 15 pips in the intended direction, move the Stop Loss to breakeven.

What is shown on the charts:

Price levels (areas) of support and resistance — levels that serve as targets when opening longs or shorts or as sources of signals.

Red lines — channels or trendlines that display the current trend and indicate the preferred trading direction.

MACD indicator (14,22,3) — histogram and signal line — an auxiliary indicator that can also be used as a source of signals.

Important speeches and reports (listed in the news calendar) can strongly affect a currency pair's movement. Therefore, when they are released, one should trade as cautiously as possible or step aside to avoid a sudden price reversal against the prior direction.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear strategy and money-management rules is the key to long-term success in trading.