06.09.202407:15 Forex Analysis & Reviews: Key Events on September 6: Fundamental Analysis for Beginners

Analysis of Macroeconomic Reports:

Not many macroeconomic events are scheduled, but almost all are very important. Therefore, novice traders can expect increased volatility and price movements in different directions today. In the European Union, a third estimate of the GDP for the second quarter will be published. This report is secondary in importance and unlikely to provoke any market reaction. In the US, however, the data are much more significant. The NonFarm Payrolls report and the unemployment rate can strongly influence the dollar's movement today and determine its dynamics for the coming weeks. If these reports are again worse than forecasts, the likelihood of a 0.5% rate cut by the Federal Reserve on September 18th will increase again. This is sufficient for the market to continue selling the dollar for several more weeks.

Analysis of Fundamental Events:

The speeches by Fed officials Christopher Waller and Jonathan Williams from Friday's fundamental events are noteworthy. These speeches will occur after the labor market and unemployment data are released, so today, we can get the first comments about them. Naturally, if the data are weak, we should expect dovish rhetoric from the Fed officials. And dovish rhetoric will provoke a new fall in the dollar.

General Conclusions:

Both currency pairs can move in any direction during the last trading day of the week. Movements in the first half of the day are likely to be weak. In the second half, volatility may spike, and both pairs may move up and down alternately. It is impossible to predict what the unemployment and labor market reports will show, so be prepared for any development.

Basic Rules of the Trading System:

1) The strength of a signal is determined by the time it takes for the signal to form (bounce or level breakthrough). The less time it took, the stronger the signal.

2) If two or more trades were opened around any level due to false signals, subsequent signals from that level should be ignored.

3) In a flat market, any currency pair can form multiple false signals or none at all. In any case, it's better to stop trading at the first signs of a flat market.

4) Trades should be opened between the start of the European session and midway through the U.S. session. After this period, all trades must be closed manually.

5) In the hourly time frame, trades based on MACD signals are only advisable amidst good volatility and a trend confirmed by a trendline or trend channel.

6) If two levels are too close to each other (5 to 20 pips), they should be considered a support or resistance area.

7) After moving 15-20 pips in the intended direction, the Stop Loss should be set to break even.

What's on the Charts:

Support and Resistance price levels: targets for opening long or short positions. You can place Take Profit levels around them.

Red lines: channels or trend lines that depict the current trend and indicate the preferred trading direction.

The MACD indicator (14,22,3): encompassing both the histogram and signal line, acts as an auxiliary tool and can also be used as a source of signals.

Important speeches and reports (always noted in the news calendar) can profoundly influence the movement of a currency pair. Hence, trading during their release calls for heightened caution. It may be reasonable to exit the market to avoid sharp price reversals against the prevailing movement.

For beginners, it's important to remember that not every trade will yield profit. Developing a clear strategy and effective money management is key to success in trading over the long term.