Macroeconomic Reports:

There aren't many macroeconomic reports scheduled for Friday, and only one of them is truly important – the ISM Services PMI in the U.S. In addition to this index, we'll also see second estimates of services PMIs for Germany, the UK, and the EU, as well as the Producer Price Index in the EU. However, these reports are of secondary importance. Also, the NonFarm Payrolls report and the unemployment rate were supposed to be released today, but most likely that won't happen due to the U.S. government "shutdown" that began on October 1. Therefore, all attention today will be on the ISM Services PMI.

Fundamental Events Overview:

Several key fundamental events are scheduled for Friday. Most notably, speeches from European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey. Lagarde may comment on the latest inflation report, while Andrew Bailey may provide guidance on the next steps for the Bank of England's monetary policy. Both speeches are potentially important.

There will also be several speeches from Fed representatives, who may answer the question of what the central bank's decisions will be based on if no labor market and unemployment reports are available. The next Fed meeting is scheduled for late October, by which time the shutdown may already be over. However, October data could end up being "distorted" due to the shutdown. Thus, extra attention will also be on Fed officials.

General Conclusions:

On the last trading day of the week, both currency pairs may continue moving upward. The British pound has ended its downward trend, which suggests that the euro is also likely to have completed its downtrend (although it hasn't yet broken the trendline). The euro has a trading zone at 1.1745–1.1754, while the pound has entry zones at 1.3466–1.3475 and 1.3413–1.3421.

Basic Rules of the Trading System:

1. The strength of a signal depends on the time it takes to form (bounce or breakout). The less time required, the stronger the signal.
2. If two or more false signals form near the same level, all subsequent signals from that level should be ignored.
3. In flat markets, any pair can generate numerous false signals or none at all. In any case, it's better to stop trading at the first signs of a flat.
4. Trades should be opened during the European session and remain open until the mid-U.S. session, after which all positions should be closed manually.
5. On the H1 timeframe, MACD signals should only be traded with sufficient volatility and a confirmed trend (by a trendline or trend channel).
6. If two levels are very close (5–20 pips apart), they should be treated as a support or resistance zone.
7. After 15–20 pips of movement in the right direction, the Stop Loss should be moved to breakeven.

What's on the Charts:

• Support and resistance price levels – targets for opening buy or sell positions. Take Profit levels can be set around them.
• Red lines – channels or trendlines that show the current trend and indicate the preferred trading direction.
• MACD indicator (14,22,3) – histogram and signal line – an auxiliary tool that can also be used as a source of signals.
• Important speeches and reports (always listed in the news calendar) can strongly influence currency pair movements. During their release, trading should be done with maximum caution, or positions should be closed to avoid sharp price reversals against the preceding trend.
• Remember that not every trade can be profitable. Developing a clear strategy and proper money management are the keys to long-term success in trading.