Review of Macroeconomic Reports:

A considerable number of macroeconomic releases are scheduled for Wednesday. The European Union will publish its October Consumer Price Index (CPI) today, and inflation is expected to accelerate further to 4%. This would, in our view, make another tightening of the ECB's monetary policy in December inevitable. If the market finally begins to take this factor into account, the euro could start an upward trend. In the United States, the ADP employment report and the ISM Services Business Activity Index will be released today. These reports are also important, but it remains unclear whether they will trigger any market reaction, as results from the U.S. congressional elections will continue to come in throughout the day. These results are considerably more significant than routine economic reports.

Review of Fundamental Events:

Among Wednesday's fundamental events, particular attention should be paid to the U.S. congressional elections, with results being updated continuously in real time. At present, the Democrats are leading by a substantial margin in both chambers of Congress. They need just 6 more votes out of the remaining 19 to secure control of the Senate. In the House of Representatives, their lead is approximately two to one. However, the final outcome has yet to be determined. The market already demonstrated overnight how it would react to the Republicans potentially losing control of Congress. The U.S. dollar could continue to decline throughout the day.

The geopolitical situation remains unfavorable. The United States and Iran are not currently holding official negotiations, although Donald Trump continues to insist that an agreement can be reached. Immediately after the congressional elections, the United States and Israel may resume strikes against Iran, as the likelihood of reaching an agreement with Tehran continues to decline. Iran, in turn, is prepared to resume strikes against U.S. allies in the region and even American military bases outside the Middle East. In addition, mass unrest continues in several European countries, which is unlikely to support the euro. However, today and through the end of the week, traders' attention will be focused on the U.S. elections and other important events and economic reports.

General Conclusions:

Market volatility could be relatively high on the third trading day of the week, as numerous important events are scheduled for today. An upward breakout from the sideways channel is expected for the euro, while the pound is expected to continue rising within its upward trend. The euro can be traded around the 1.1267–1.1275 level, while the British pound can be traded around the 1.3456–1.3476 level.

Key Rules of the Trading System:

1. Signal strength is determined by the time required for a signal to form (a rebound from or a breakout of a level). The less time required, the stronger the signal.
2. If two or more trades have been opened near a particular level based on false signals, all subsequent signals from that level should be ignored.
3. In a sideways market, any currency pair may generate numerous false signals or none at all. Technical levels may be disregarded by price action.
4. On the hourly timeframe, MACD signals should preferably be traded only when volatility is sufficient and the trend is confirmed by a trendline or trend channel.
5. If two levels are located too close to each other (5–20 points apart), they should be treated as a support or resistance area.
6. Once the price has moved 15 points in the favorable direction, the Stop Loss should be moved to breakeven.

What the Charts Show:

Support and resistance price levels (areas) are levels that serve as targets for buy or sell trades or as sources of trading signals.

Red lines represent channels or trendlines that illustrate the current trend and indicate the preferred trading direction.

The MACD indicator (14, 22, 3) consists of a histogram and a signal line. It is a supplementary indicator that can also be used to generate trading signals.

Important speeches and economic reports (listed in the economic calendar) can have a significant impact on currency pair movements. Therefore, trading should be approached with extreme caution when these events are released, or positions should be closed to avoid a sudden price reversal against the preceding movement.

Beginner forex traders should remember that not every trade can be profitable. Developing a clear trading strategy and applying sound money management are essential to long-term trading success.