Trading plan for EUR/USD on September 4. Simple tips for beginners

EUR/USD traded lower on Friday, despite no significant reasons or grounds for such a movement. Take note that although the NonFarm Payrolls report, an important indicator, exceeded the forecasts, it still had a negative impact on the dollar due to the downward revision of the July figure. In addition, unemployment significantly increased. We mentioned that a 0.1% deviation from the forecast wouldn't be catastrophic, but the actual increase was 0.3%! The ISM Manufacturing Index improved but remained below the key level of 50.0. In general, we believe that there weren't strong reasons for a significant dollar rally.

The pair has shown confusing movements in recent weeks. They have been so erratic that it's difficult to establish a clear trendline or channel at the moment. There's also the possibility of a new upward movement this week, although we still expect the pair to fall in the medium term. However, there are hardly any important reports this week. It would be logical to expect a decline, but there wasn't much of that logic on Friday.

There were several trading signals on the 5-minute chart, but most of them should have been ignored. The first buy signal allowed for a profit of at best 10 pips. However, the second, third, fourth, and fifth signals should not have been executed. The second signal formed half an hour before the US reports. The third and fourth occurred precisely during the release of the US reports. The fifth was a sell signal, although it was quite challenging to expect a decline after the release of unemployment and labor market reports. Therefore, the ideal strategy would have been to ignore all of this data. Unfortunately, this happens; the market doesn't always react logically to data.

The pair's movements on the 30M chart have been quite erratic in recent weeks. It might seem that the bullish correction has ended after the pair fell on Thursday and Friday, but we believe that it could still rise this week. The area between 1.0767-1.0781 is currently significant. Breaking through this area would suggest further declines for the pair and a stronger US dollar. The key levels on the 5M chart are 1.0607-1.0613, 1.0673, 1.0733, 1.0767-1.0781, 1.0835, 1.0871, 1.0901-1.0904, 1.0936, 1.0971-1.0981, 1.1011. A stop loss can be set at a breakeven point as soon as the price moves 15 pips in the right direction. European Central Bank President Christine Lagarde and Chief Economist Philip Lane are on the calendar to speak today. If both officials show a dovish stance, then breaking through the area of 1.0767-1.0781 should not be a problem.

1) The strength of the signal depends on the time period during which the signal was formed (a rebound or a break). The shorter this period, the stronger the signal.

2) If two or more trades were opened at some level following false signals, i.e. those signals that did not lead the price to Take Profit level or the nearest target levels, then any consequent signals near this level should be ignored.

3) During the flat trend, any currency pair may form a lot of false signals or do not produce any signals at all. In any case, the flat trend is not the best condition for trading.

4) Trades are opened in the time period between the beginning of the European session and until the middle of the American one when all deals should be closed manually.

5) We can pay attention to the MACD signals in the 30M time frame only if there is good volatility and a definite trend confirmed by a trend line or a trend channel.

6) If two key levels are too close to each other (about 5-15 pips), then this is a support or resistance area.

Support and Resistance price levels can serve as targets when buying or selling. You can place Take Profit levels near them.

Red lines are channels or trend lines that display the current trend and show which direction is better to trade.

MACD indicator (14,22,3) is a histogram and a signal line showing when it is better to enter the market when they cross. This indicator is better to be used in combination with trend channels or trend lines.

Important speeches and reports that are always reflected in the economic calendars can greatly influence the movement of a currency pair. Therefore, during such events, it is recommended to trade as carefully as possible or exit the market in order to avoid a sharp price reversal against the previous movement.

Beginners should remember that every trade cannot be profitable. The development of a reliable strategy and money management are the key to success in trading over a long period of time.