Analyzing Thursday's Trades:

EUR/USD on 1H Chart

The EUR/USD pair sustained its upward movement on Thursday. It was weak, uncertain, and corrective, but the pair rose. Remember that all movement after August 26th is considered a weak correction. Thus, the current upward movement looks like the beginning of a new phase of the upward trend of recent weeks and months. This week, the dollar had hoped for support from the macroeconomic background, but these hopes began to fade as early as Tuesday. First, the ISM manufacturing business activity index was not good enough, and then the JOLTS report was weaker than forecasts. Then, the ADP labor market report set a record low for the last 3.5 years. Therefore, the dollar might have been happy to grow, but how can it grow when only disappointing data comes from the US? We mentioned that the US currency can freely decline until September 18th and for a month or two after.

EUR/USD on 5M Chart

Several trading signals were formed in the 5-minute timeframe on Thursday, but volatility was weak. The US trading session saw a disastrous ADP report and positive ISM services business activity index. That is why the dollar initially fell, rose, and fell again. Today, one needs to be extra cautious because the reaction to the NonFarm Payrolls and unemployment reports will follow. Reversals, false signals, and increased volatility are possible.

How to Trade on Friday:

In the hourly time frame, the EUR/USD pair has consolidated below the ascending trend line and, for the first time in a long while, has a chance to form a downward trend that would be logical and consistent with all factors and types of analysis. Unfortunately, illogical dollar sales could quickly resume after a downward correction, as no one knows how long the market will continue to price in the Federal Reserve's monetary policy easing, which has yet to start. However, the fact remains that the market continues to price in nearly all future Fed rate cuts, and the macroeconomic data from the US more often disappoint than please.

On Friday, novice traders can expect movements in any direction and of any strength. There are no guarantees that the US data will fail, so a rise in the dollar is also possible.

The key levels to consider on the 5M time frame are 1.0726-1.0733, 1.0797-1.0804, 1.0838-1.0856, 1.0888-1.0896, 1.0940, 1.0971, 1.1011, 1.1048, 1.1091, 1.1132, 1.1191, and 1.1275-1.1292. On Friday, the Eurozone will release a report on the GDP for the second quarter in the third assessment, and in the US, the key reports on Non-Farm Payrolls and unemployment levels will be published.

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 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.