04.09.202605:37 Forex Analysis & Reviews: What to Watch on September 4? Review of Fundamental Events for Beginners

Analysis of macroeconomic releases:

Several macroeconomic publications are scheduled for Friday. For example, the EU will publish a retail sales report, but who in the market is interested in retail sales right now? All traders' attention is focused on US inflation and labor market data because no one yet understands what further actions the US central bank will take. Today, Nonfarm Payrolls and the unemployment rate will be released, potentially changing traders' expectations about the Federal Reserve's key rate in September.

Analysis of fundamental events:

Among Friday's fundamental events are speeches by Bank of England Governor Andrew Bailey and European Central Bank Chief Economist Philip Lane. In general, it is clear what to expect from both central banks in the near term, but additional comments and hints on the subject will certainly not hurt. Recall that the baseline scenario now is another ECB policy tightening this autumn, and a possible BoE tightening if UK inflation continues to rise.

The geopolitical backdrop still leaves much to be desired. The United States and Iran are not conducting any negotiations at this time; the Strait of Hormuz remains closed or partially closed, and Yemeni Houthis continue to blockade Saudi Arabia. Donald Trump has vowed an unprecedented economic operation to destroy Iran and threatens sanctions against any countries that interact with it. However, so far no one has supported Trump's plan to destroy Iran, and whether it will be implemented is unknown. What is known is the first US attacks in a month on launch sites near the Strait of Hormuz. Iran responded by announcing a military operation against the US and its regional allies. Tensions in the Middle East are heating up again.

General conclusions:

During the last trading day of the week, currency pairs may show strong movements. The euro can be traded today from the 1.1655–1.1665 area, and the pound from the 1.3456–1.3476 and 1.3587–1.3598 areas. In general, the decline of the euro and the pound may continue, since technical trends for both currency pairs have changed to downward. However, US Nonfarm Payrolls and the unemployment rate can strongly affect traders' sentiment, and medium-term trends remain upward. The dollar can still only count on corrections.

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.