01.09.202604:46 Forex Analysis & Reviews: What to Pay Attention to on September 1? Analysis of Fundamental Events for Beginners

Analysis of Macroeconomic Reports:

There are quite a few macroeconomic publications scheduled for Tuesday, but only a few are truly significant. In Germany, the retail sales report will be published early in the morning. In the Eurozone, an important inflation report for August will be released. In the U.S., there will also be a fairly important ISM manufacturing index and a less significant JOLTS report on job openings. Remember that this week, reports on Nonfarm Payrolls and the unemployment rate will also be published in the U.S., so the market will be awaiting them to draw conclusions. Therefore, today we need to pay close attention to European inflation and business activity in the U.S.

Analysis of Fundamental Events:

Among the fundamental events on Tuesday, the speech by Federal Reserve representative Michael Barr is notable; however, on Friday, the speech by Fed Chair Kevin Warsh did not provide any fundamentally new information. Once again, phrases about high inflation and the need to tackle it were heard. But does this mean that the Fed's key interest rate will be raised in September? In our view, no. However, the market concluded that it would. Based on this factor and a technical analysis, the dollar may show moderate strengthening this week. Still, the prospects for the American currency largely depend on reports on business activity and the labor market.

The geopolitical backdrop still leaves much to be desired. The U.S. and Iran are currently not engaged in any negotiations; the Strait of Hormuz remains closed or partially closed, and the Yemeni Houthis maintain a blockade of Saudi Arabia. Donald Trump has decided to conduct an unprecedented economic operation to eliminate Iran and threatens to impose sanctions against all countries that interact with it in any way. However, as of now, no one has supported Trump's plan to eliminate Iran, and whether it will be implemented is uncertain. It has, however, been reported that U.S. forces have carried out their first strikes in a month on launch sites near the Strait of Hormuz. As we can see, the conflict has not cooled and remains very much present.

General Conclusions:

During the second trading day of the week, currency pairs may trade rather weakly again. The euro can be traded today from the area of 1.1584-1.1594, while the British pound can be traded from the areas of 1.3456-1.3476 and 1.3587-1.3598. Overall, we expect the decline to continue in the coming days, as the technical trends for both currency pairs have shifted to bearish.

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 positioned too close to each other (within 5-20 pips), they should be considered a support or resistance area.
6. After moving 15 pips in the right direction, a stop-loss should be set to break even.

What to Look for on the Charts:

Price levels (areas) of support and resistance are levels that serve as targets when opening buy or sell trades, or as sources of signals.

Red lines indicate channels or trend lines that illustrate the current trend and show the preferred direction for trading.

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

Important speeches and reports (contained in the news calendar) can significantly influence the movement of currency pairs. Therefore, during their release, trading should be approached with utmost caution, or traders should exit the market to avoid sudden reversals against the preceding movement.

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.