04.09.202614:11 Forex Analysis & Reviews: EUR/USD: Trading Tips for Beginner Traders – September 4 (U.S. Session)

Trade Analysis and Trading Tips for the Euro

The test of the 1.1622 price level occurred when the MACD indicator had already moved significantly below the zero line, which limited the pair's downward potential. For this reason, I did not sell the euro and instead waited for Scenario #2 for a buy trade to materialize. Ultimately, the second test of 1.1622 triggered this scenario, but the euro did not make a significant rise, for objective reasons.

The weak retail sales report confirmed that consumers remain a vulnerable area of the eurozone economy. Sales fell by 0.6% in July, while annual growth virtually disappeared, amounting to just 0.6%. The underlying structure only reinforced this picture: while food sales increased by 0.4%, non-food products fell by 1.4%. To me, this is a clear sign that higher energy costs continue to put pressure on disposable incomes, forcing Europeans to cut spending on everything except food. The single currency responded with a decline, but, as expected, there was no major sell-off. I still believe the euro has support ahead of the central bank's decision, and the EUR/USD pair is more likely to undergo a moderate correction. However, we may see considerable volatility today, and here is why.

The euro is approaching the key report of the week with heightened expectations, as the August NFP could set the tone for trading. The market expects employment to increase by approximately 50,000, with unemployment at around 4.1%, but the broader context is more important than the forecast itself. The entire week of U.S. labor-market data has been disappointing: the ADP report fell sharply, while job-opening data showed a decline in hiring, significantly increasing tension ahead of the official figures. However, in my view, even data in line with forecasts would not rule out a September Fed rate hike, as the regulator has made it clear that inflation is currently the priority. That is why I believe that only a significant third consecutive disappointment in employment could seriously undermine the dollar and force the Fed to consider a pause.

For the single currency, this means that a weak report would create room for the EUR/USD pair to rise, while a result in line with expectations would leave the initiative with the dollar. Given the weakness that has already accumulated in the U.S. labor market over the course of the week, I believe the risk of an adverse surprise for the dollar is elevated, and I would not rule out a sharp move in the euro immediately after the release.

As for the intraday strategy, I will focus primarily on the implementation of Scenarios #1 and #2.

Buy Signal

Scenario #1: Today, the euro can be bought when the price reaches around 1.1627 (the green line on the chart), with a target of 1.1657. At 1.1657, I plan to exit the market and also sell the euro in the opposite direction, targeting a move of 30–35 points from the entry point. The euro can be expected to rise today only after weak U.S. data. Important! Before buying, make sure that the MACD indicator is above the zero line and has only just started rising from it.

Scenario #2: I also plan to buy the euro today if the price tests 1.1615 twice consecutively while the MACD indicator is in the oversold area. This will limit the pair's downward potential and lead to a reversal higher. A rise toward the opposite levels of 1.1627 and 1.1657 can be expected.

Sell Signal

Scenario #1: I plan to sell the euro after the price reaches 1.1615 (the red line on the chart). The target will be 1.1595, where I plan to exit the market and immediately buy in the opposite direction, targeting a 20–25-point move in the opposite direction from the level. Downward pressure on the pair will return with strong U.S. data. Important! Before selling, make sure that the MACD indicator is below the zero line and has only just started declining from it.

Scenario #2: I also plan to sell the euro today if the price tests 1.1627 twice consecutively while the MACD indicator is in the overbought area. This will limit the pair's upward potential and lead to a reversal lower. A decline toward the opposite levels of 1.1615 and 1.1595 can be expected.

What the chart shows:

• Thin green line – the entry price at which the trading instrument can be bought;
• Thick green line – the estimated price at which Take Profit orders can be placed or profits can be taken manually, as further growth above this level is unlikely;
• Thin red line – the entry price at which the trading instrument can be sold;
• Thick red line – the estimated price at which Take Profit orders can be placed or profits can be taken manually, as further decline below this level is unlikely;
• MACD indicator. When entering the market, it is important to consider the overbought and oversold zones.

Important. Beginner Forex traders should be very cautious when making market-entry decisions. Before the release of important fundamental reports, it is best to stay out of the market to avoid being caught in sharp exchange-rate fluctuations. If you decide to trade during a news release, always place stop orders to minimize losses. Without stop orders, you can lose your entire deposit very quickly, especially if you do not use proper money management and instead trade large volumes.

And remember that successful trading requires a clear trading plan, such as the one presented above. Making spontaneous trading decisions based on the current market situation is a losing strategy for an intraday trader from the outset.