05.09.202506:49 Forex Analysis & Reviews: What to Pay Attention to on September 5? A Breakdown of Fundamental Events for Beginners

Macroeconomic Report Review:

There are quite a few macroeconomic releases scheduled for Friday, and almost all of them are important or at least relatively so. Of course, the primary focus will be on the US NonFarm Payrolls and the unemployment rate. These data will determine the Federal Reserve's decision at its September 16-17 meeting. If unemployment rises and Nonfarms once again come in below forecasts, the Fed will be almost certain to cut its key interest rate. This, in turn, could trigger the dollar's decline, which we've been anticipating for about two weeks. Among other reports, UK retail sales, Eurozone GDP, and US wage figures are worth highlighting. However, we believe that market reaction to these will be weak or nonexistent.

Fundamental Events Review:

There's absolutely nothing to note among Friday's fundamental events—but today, they won't be needed anyway. Traders will have enough macroeconomic data at their disposal to make forward-looking decisions. Let's recall that, in any case, the Fed is almost certain to start cutting rates. The only question is how quickly rates will be lowered over the next year to year-and-a-half. Therefore, during all this time, the US currency will be under significant fundamental pressure. We should also not forget the ongoing trade war, as its persistence means we cannot see what could create demand for the dollar. As a bonus, let's add Trump's pressure on the Fed to the list of factors weighing on the dollar. The US President clearly wants to change half of the FOMC, which threatens the Fed's independence and could further undermine confidence in the US dollar.

General Conclusions:

On the last trading day of the week, both currency pairs may attempt to continue their growth. However, volatility this week is extremely low, and trending movement is virtually absent. Thus, we do not expect movement before the publication of US data. What happens after the US labor market and unemployment reports are released will depend on the nature of those reports.

Key Rules for the Trading System:

1. Signal Strength: The shorter the time it takes for a signal to form (a rebound or breakout), the stronger the signal.
2. False Signals: If two or more trades near a level result in false signals, subsequent signals from that level should be ignored.
3. Flat Markets: In flat conditions, pairs may generate many false signals or none at all. It's better to stop trading at the first signs of a flat market.
4. Trading Hours: Open trades between the start of the European session and the middle of the US session, then manually close all trades.
5. MACD Signals: On the hourly timeframe, trade MACD signals only during periods of good volatility and a clear trend confirmed by trendlines or trend channels.
6. Close Levels: If two levels are too close (5–20 pips apart), treat them as a support or resistance zone.
7. Stop Loss: Set a Stop Loss to breakeven after the price moves 15–20 pips in the desired direction.

Key Chart Elements:

Support and Resistance Levels: These are target levels for opening or closing positions and can also serve as points for placing Take Profit orders.

Red Lines: Channels or trendlines indicating the current trend and the preferred direction for trading.

MACD Indicator (14,22,3): A histogram and signal line used as a supplementary source of trading signals.

Important speeches and reports, which are consistently featured in the news calendar, can significantly influence the movement of a currency pair. Therefore, during their release, it is advisable to trade with caution or consider exiting the market to avoid potential sharp price reversals against the prior trend.

Beginners in the Forex market should understand that not every transaction will be profitable. Developing a clear trading strategy and practicing effective money management are crucial for achieving long-term success in trading.