Analysis of Macroeconomic Reports:

There are very few macroeconomic publications scheduled for Friday, but one could have a bombshell effect on the market. Later today, the annual revision of the Non-Farm Payrolls figure will be released. It is difficult to express in words how important this indicator is. While each monthly Non-Farm Payrolls report typically provokes a strong market reaction, the annual report can easily trigger a movement of 100-150 pips. No other significant reports are scheduled for today.

Analysis of Fundamental Events:

Among the fundamental events on Friday, only the speech by Federal Reserve Chair Kevin Warsh stands out. Warsh will likely touch on monetary policy, and the market cannot help but react to his words. However, we believe that Warsh's rhetoric will again be maximally vague and non-specific. Thus, the question will be how the market interprets Warsh's words. The interpretation can vary widely. Immediately after Warsh took office as chair of the Fed, the market began to expect monetary policy tightening. However, in August, the "hawkish" expectations almost completely melted away, although Warsh continues to insist on the need to combat high inflation. Trust in the Fed Chair is currently extremely low.

The geopolitical backdrop still leaves much to be desired. The U.S. and Iran are not currently engaged in any negotiations, the Strait of Hormuz remains closed or partially closed, and Yemeni Houthis are maintaining a blockade of Saudi Arabia. Tehran has put forward a list of demands to Washington necessary for opening the Strait, which Donald Trump will not comply with under any circumstances. Iran has also warned Washington that if the blockade is not lifted, it will carry out a "cleansing" of the strait using its own forces. Trump has decided to conduct an unprecedented economic operation to destroy Iran and threatens to impose sanctions on all countries that interact with it. Iran has responded with threats to close other straits and routes if additional countries join the pressure from Washington.

General Conclusions:

On the last trading day of the week, currency pairs may trade much more actively than during the current week. The euro can be traded today from the area of 1.1655-1.1665, while the British pound can be traded from the area of 1.3587-1.3598. Overall, we expect both the euro and the pound to strengthen further against the U.S. dollar, but today everything will depend on Warsh's speech and the Non-Farm Payrolls report.

Main Rules of the Trading System:

1. The strength of the signal is assessed by the time it took to form the signal (bounce or level breakthrough). The less time required, the stronger the signal.
2. If two or more trades are opened around a certain level based on false signals, all subsequent signals from that level should be ignored.
3. In a flat, any pair can form a multitude of false signals or none at all. Technical levels may be disregarded.
4. When trading based on MACD signals on the hourly timeframe, it is advisable to do so only when volatility is high and a trend line or channel supports the trend.
5. If two levels are too close to each other (from 5 to 20 pips), they should be regarded as a support or resistance area.
6. After a 15-pip move in the correct direction, a Stop Loss should be set to break even.

What the Charts Show:

Support and resistance price levels (areas) are the targets when opening buy or sell orders or sources of signals.

Red lines denote channels or trend lines that reflect the current trend and indicate in which direction trading is currently favored.

The MACD indicator (14,22,3) – histogram and signal line – is a supporting indicator that can also be used as a source of signals.

Important speeches and reports (as listed in the news calendar) can significantly influence the movement of the currency pair. Therefore, during their release, trading should be approached with utmost caution, or one should exit the market to avoid sharp price reversals against the preceding movement.

Beginners in Forex trading should remember that not every trade can be profitable. Developing a clear strategy and proper money management are essential for long-term trading success.