Here are the details of the economic calendar for Sept 16:
The US retail sales data was published yesterday at 12:30 Universal time, where, it surged by +0.7% instead of reducing its volume by -0.8% in the period of August. The divergence of expectations played in favor of the US dollar. Along with the retail sales, America also released its figures for unemployment benefits, where they expected an increase in their number, but the data came out better than expected.
Details of statistics: The volume of initial applications for benefits rose from 312 thousand to 332 thousand. The volume of repeated applications for benefits rose from 2,852 thousand to 2,665 thousand.
* Applications for unemployment benefits reflect the number of currently unemployed citizens and those receiving unemployment benefits. This indicator is considered to be the state of the labor market, where the growth of the indicator negatively affects the level of consumption and economic growth. The reduction of applications for benefits has a positive effect on the labor market.
* The volume of retail sales is one of the main economic indicators, which is an indicator of the change in sales volume in the context of retail trade. In simple words, this indicator reflects the purchasing power of the population.
The growth in retail sales is a positive signal for the economy and, as a result, the growth of the national currency.
Analysis of trading charts from September 16:
EUR/USD
During a 30-hour stagnation within the support level of 1.1800, market participants managed to break through it along a downward course. As a result, there was an inertial movement, on the basis of which the local low (1.1770) of September 13 was broken. The oversold status appeared due to such a sharp change in the euro exchange rate. This led to a slowdown in the downward course with a subsequent pullback.
The GBP/USD pair completed the amplitude movement in the range of 1.3800/1.3880 with the breakdown of the lower border. This led to a sharp decline towards the level of 1.3760, where there was a temporary stop with a pullback to the previously broken level of 1.3800. It can be noted that the pound sterling has dramatically lost 70 points in value in a short period. This led to its oversold status and as a result, to a technical pullback, partially restoring the lost positions.
* The support level is the so-called price level, from which the quote can slow down or stop the downward course. The principle of constructing this level is to reduce the points of support on the history of the chart, where the price reversal in the market has already occurred earlier.
It is worth noting that the support level cannot be eternal and constantly leads to a price reversal. Therefore, traders always have an alternative scenario for the development of the market, which considers the breakdown of this level. Oversold market – a situation when prices have fallen too low and quickly. In this case, we are talking about the euro, which has lost almost 100 points from its value in a short period of time.
September 17 economic calendar:
The UK published its retail sales data today at 06:00 Universal time. It declined by 0.9% in August, while the annual rate fell to 0%. It can be recalled that an increase in the volume of retail sales was expected, but we got completely different indicators. The pound weakened at the time of the publication of statistics. At 9:00 Universal time, Europe’s inflation data will be published, where we expect a confirmation of its level of 3%.
The news has already been taken into account by the market, so there might be no reaction. Trading plan for EUR/USD on September 17: In this case, it can be assumed that the pullback from the pivot point of 1.1750 is temporary and the decline will continue in the market anytime soon. The previously broken levels of 1.1770 and 1.1800 are used as resistance levels. Further growth in the volume of short positions is expected if the price is kept below the level of 1.1745. This may open the way towards the range of 1.1700 – 1.1670.
Trading plan for GBP/USD on September 17:
The pound’s quote slowed down its movement around the level of 1.3800 as if considering it a possible resistance. The strongest sell signal will come from the market if the price is kept below the level of 1.3765. If so, traders will have a chance to fully restore the volume of dollar positions relative to the correction from August 23 to September 3. Traders will consider an alternative scenario if the price is kept above the level of 1.3820 in the daily period.
This step will resume the amplitude swing between the levels of 1.3800/1.3880. Short positions or Short means sell positions. The resistance level is the so-called price level, from which the quote can slow down or stop the upward movement. The principle of constructing this level is to reduce the price stop points on the history of the chart, where the price reversal in the market has already occurred earlier.
What is reflected in the trading charts?
A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices. Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.
Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future. The up/down arrows are the reference points of the possible price direction in the future.
Golden Rule:
It is necessary to figure out what you are dealing with before starting to trade with real money. Learning to trade is so important for a novice trader because the market is constantly dynamic and it is important to understand what is happening.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
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