Here are the details of the economic calendar for Sept 22:
Yesterday’s focus was on the results of the meeting of the Federal Open Market Committee (FOMC), where the regulator expectedly left the key interest rate unchanged at 0-0.25%. At the same time, the quantitative easing program, where it was expected to be curtailed, was retained.
But according to the committee, it may soon be necessary to reduce the pace of asset purchases, if the development of the economy as a whole meets its expectations. During a press conference, Fed Chairman Jerome Powell said that the regulator could begin to roll back the quantitative easing program as early as November and complete the process by mid-2022. Due to the fact that the Fed is still hesitating about curtailing the quantitative easing program, the stock market continues to increase. In view of this, the US dollar moved to strengthen.
Analysis of trading charts from September 22:
The EUR/USD pair showed a fairly strong speculative interest due to the results of the FOMC meeting. As a result, market participants broke through the support level of 1.1700, and the quote rushed towards the local low (1.1664) of August 20. The trading plan on September 22 considered the possibility of a subsequent decline if the price kept below the level of 1.1700.
The GBP/USD pair resumed its decline after a short stagnation, where the local low of September 21 was updated, and then the quote came close to the base (1.3600) of August 20. In fact, we have a complete recovery of the downward interest in relation to the corrective course from August 23 to September 14.
The trading plan on September 22 indicated high chances of a weakening of the pound sterling, where the strategy of a gradual decline towards 1.3571-1.3600 was a priority.
* 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 considering 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.
September 23 economic calendar:
Today, the preliminary PMI data for Europe, Britain, and the United States will be published. A decline in indicators is predicted for all indices. This means that they will not be able to influence the dynamics of the currency market, contrary to the main event – the meeting of the Board of the Bank of England. However, the regulator is highly likely to maintain the parameters of monetary policy. We will probably hear again that the current problems are only a temporary factor. Speculators can locally seize on the information noise, depending on the rhetoric of the Bank of England.
At the same time, the United States will also release its data on applications for unemployment benefits, where they are predicted to reduce their volume. This may support the US dollar if it coincides with the expectations.
Details of statistics:
The volume of initial applications for benefits may fall from 332 thousand to 310 thousand. The volume of repeated applications for benefits may fall from 2,665 thousand to 2,550 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.
Trading plan for EUR/USD on September 23:
The technical rollback returned the quote slightly above the 1.1700 level, without breaking the downward cycle. It can be assumed that the return of the price below the level of 1.1700 will increase the chance of sellers for a subsequent decline towards 1.1664. It should be noted that a pullback is seen as a temporary phenomenon in the market.
Trading plan for GBP/USD on September 23:
The area of the local low (1.3600) of August 20 serves as a support level, relative to which a pullback occurred. Taking into account the consistent decline and full recovery relative to the correction from August 23 to September 14, it can be assumed that the downward movement is still considered the main movement in the market. Therefore, the breakdown of the level of 1.3600 will lead to a further decline of the pound.
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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