03.09.202604:42 Forex Analysis & Reviews: What to Watch on September 3? A Guide to Fundamental Events for Beginners

Analysis of macroeconomic releases:

There are relatively few macroeconomic publications scheduled for Thursday. Most are completely secondary. For example, Germany, the UK, the Eurozone and the US will publish second-estimate services PMIs for August. These releases are unlikely to provoke any notable market reaction. In the US, initial jobless claims and the ISM services index will be published. The ISM services index is the most important report of the day that traders may react to — but even here a strong reaction is unlikely.

Analysis of fundamental events:

Among Thursday's fundamental events are speeches by Federal Reserve Monetary Policy Committee members Beth Hammack and Christopher Waller. Recall that the new Fed Chair Kevin Warsh has tightened guidance on officials' public communications, and they are now prohibited from commenting on future changes to the policy rate. Therefore, we strongly doubt that Hammack or Waller will provide a clear forecast for the September meeting. The market is left guessing what the Fed will decide in September, and forecasts for that event keep changing.

The geopolitical backdrop remains worrying. The US and Iran are not currently negotiating; the Strait of Hormuz remains closed or partially closed; the Yemeni Houthis continue to blockade Saudi Arabia. Donald Trump has decided to carry out an unprecedented economic campaign aimed at weakening Iran and threatens to sanction any countries that in any way interact with it. So far, however, no one has publicly supported Trump's plan to "destroy" Iran, and whether it will be implemented is unknown. What is known is that the US carried out its first strikes in a month on launch sites near the Strait of Hormuz, to which Iran responded by announcing a military operation against the US and its regional allies. Tensions in the Middle East are heating up again.

Overall conclusions:

During the penultimate trading day of the week, currency pairs may trade rather quietly again. The euro can be traded today from the 1.1584–1.1594 area, and the pound from the 1.3456–1.3476 area. Overall, declines in the euro and the pound may continue because technical trends for both pairs have turned downward — but tomorrow, the US Nonfarm Payrolls and unemployment rate will be released, and those reports can strongly affect market sentiment and views of the dollar.

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.