Macroeconomic Reports Overview

Only a few macroeconomic events are scheduled for Monday, which marks the start of the first week of a new month. The U.S. will release numerous reports on business activity, the labor market, and unemployment—key data points. Today, we will see only the ISM Manufacturing PMI in the U.S., which will kick off the lineup of critical reports. The second estimate of November's Manufacturing PMIs will be published in the Eurozone, Germany, and the UK. Additionally, the Eurozone will release its unemployment rate. However, we consider all reports, except the ISM PMI, to be secondary in importance.

Fundamental Events Overview

European Central Bank President Christine Lagarde's speech stands out among Monday's fundamental events. We don't expect any significant statements from her, but last Friday's Eurozone inflation report could prompt some comments. As a reminder, the ECB's final meeting of the year will take place in December, where interest rates could be cut by as much as 0.5%, a decidedly dovish move. While we doubt the ECB will take this step, Lagarde might give the market a clearer idea of what to expect.

General Conclusions

Both currency pairs are likely to move during the first trading day of the week in response to fundamental and macroeconomic developments. The U.S. ISM Manufacturing PMI will impact both pairs, while Lagarde's speech is significant for the euro.

Key Rules for the Trading System:

1. Signal strength is determined by the time it takes for a signal to form (bounce or breakout of a level). The shorter the time, the stronger the signal.
2. If two or more false signals are generated near a level, subsequent signals from that level should be ignored.
3. In a flat market, any pair may produce numerous false signals or none at all. In such cases, it's better to stop trading at the first signs of consolidation.
4. Trades should be opened during the European session through the middle of the American session. All trades should be manually closed thereafter.
5. On the hourly timeframe, trades based on MACD signals should only be executed during periods of strong volatility and trends confirmed by trendlines or trend channels.
6. If two levels are very close (5–20 pips apart), they should be treated as a support or resistance zone.
7. After a 15–20 point movement in the correct direction, set a Stop Loss at breakeven.

What's on the Charts:

Support and Resistance Levels: Targets for opening buy or sell orders. These are ideal points for setting Take Profit levels.

Red Lines: Trendlines or channels reflecting the current trend direction and indicating the preferred trading direction.

MACD Indicator (14,22,3): A histogram and signal line serving as auxiliary indicators and sources of signals.

Key News Events and Reports: Always listed in the economic calendar, these can significantly impact currency pair movements. Exercise caution or exit the market during such events to avoid sharp price reversals.

Every trade cannot be profitable. The key to long-term success in Forex trading lies in developing a clear strategy and effective money management.