Macroeconomic reports review:

Very few macroeconomic releases are scheduled for Monday. Germany will publish its October business-climate report, but it is a secondary indicator, and no market reaction is expected. Therefore, volatility on the first trading day of the week may be weak, and the technical picture is unlikely to change during the day. The euro may remain within the local sideways channel of 1.1187–1.1260 and drift lower. The pound may continue to correct after a week of gains.

Fundamental events analysis:

Monday's fundamental events are uneventful. No central-bank officials are scheduled to speak that day. This week the European Central Bank and the Federal Reserve hold meetings, and next week the Bank of England meets. Accordingly, monetary-policy committee members cannot meaningfully comment on rates or future decisions now. The ECB and the Fed will likely leave key rates unchanged, while the BoE is expected to deliver the first tightening in its cycle to combat rising inflation.

The geopolitical backdrop remains poor. The United States and Iran are not conducting official talks at present, though Donald Trump continues to insist a deal could be signed after the U.S. congressional elections. There are also reports that the U.S. and Israel could resume strikes on Iran immediately after the midterms, since the likelihood of a deal with Tehran is trending toward zero. We find that scenario more plausible than a ceasefire and an end to the war. Iran, for its part, is ready to resume strikes on U.S. allies in the region. In addition, mass unrest continues in many European countries, which hardly adds optimism for the euro.

General conclusions:

On the first trading day of the week, currency pairs may trade sluggishly because no major events are scheduled. Accordingly, do not expect trend moves even intraday. The euro can be traded on Monday from the 1.1198–1.1218 area, and the pound from the 1.3380–1.3386 area.

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.