07.09.202602:07 Forex Analysis & Reviews: What to Watch on September 7? Review of Fundamental Events for Beginners

Review of macroeconomic releases:

Very few macroeconomic publications are scheduled for Monday, and none of them are truly important. Germany will publish an industrial production report and the EU will release the third estimate of Q2 GDP. Industrial production is expected to grow, but the sector has faced serious problems for about five years. EU GDP may rise 0.4% month?on?month and 1.0% year?on?year, which is hardly a major achievement. Therefore, market reaction to these data may be very weak, and they are unlikely to provide strong support to the euro.

Review of fundamental events:

There is nothing noteworthy among Monday's fundamental events. The market remains puzzled about what the Federal Reserve will decide in September. This week, at least two members of the Monetary Committee said there are no grounds for tightening policy. But next week, US inflation data will be published, and grounds for action could emerge. In general, the situation remains contradictory and uncertain. We believe the key rate will not change.

The geopolitical backdrop still leaves much to be desired. The US and Iran are not conducting negotiations at present; the Strait of Hormuz remains closed or partially closed, and Yemeni Houthis continue to blockade Saudi Arabia. Donald Trump has decided to pursue an unprecedented economic operation to destroy Iran and threatens sanctions against any countries interacting 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 with an announced military operation against the US and its regional allies. Tensions in the Middle East are heating up again.

General conclusions:

During the first trading day of the week, currency pairs may return to their usual dynamics. The euro can be traded today from the 1.1584–1.1594 area, and the pound from the 1.3456–1.3476 area. In general, the decline of the euro and the pound may continue on corrective grounds. Still, central bank meetings are approaching, and the market increasingly doubts the Fed will tighten policy. That is the key factor supporting the dollar at the moment.

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.