Here are the details of the economic calendar for Sept 23:
The price of the pound surged by 1% although the Bank of England did not change the parameters of monetary policy during its last meeting. This is considered a very strong price change in a short period of time. The reason for the speculation is caused by a number of signals from the Bank of England. First, the minutes contain clear plans for a possible interest rate increase in 2022. Second, during the voting, 7 out of 2 members of the management Board retained the current parameters of the quantitative easing program.
The lever for speculators was the two voices that signaled that the quantitative easing program could be reduced in the future. During the US trading session, data on applications for unemployment benefits in the US were published, where they recorded an increase in their volume instead of the predicted reduction. This was a blow to the dollar positions, which were already in the correction stage at that moment.
Details of statistics:
The volume of initial applications for benefits rose from 335 thousand to 351 thousand. The volume of repeated applications for benefits rose from 2,714 thousand to 2,845 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.
Analysis of trading charts from September 23:
The EUR/USD pair failed to stay below the price level of 1.1700, instead of which it made a correction towards 1.1750, where the volume of long positions has repeatedly decreased in history. Expectations regarding the price’s downward development still take place in the market. This is indicated not only by the downward cycle from the resistance area of 1.1880/1.1905 but also by the change of trading interests in the medium term.
The trading plan on September 23 considered the possibility of a subsequent decline, but only after the price returned below the 1.1700 level. Until this moment, stagnation or correction in the market was not ruled out.
The GBP/USD pair showed strong speculative interest due to the results of the Bank of England meeting. As a result, traders won back the area of the local low of 1.3600 as a support level. This led to the formation of a large-scale correction in the market of more than 130 points.
With all the existing upward sentiment caused by the BoE’s recent meeting, the downward cycle still remains the main direction in the medium term. The trading plan on September 23 indicated the possibility of prolongation of the downward cycle, but only after the price is kept below the support level of 1.3600.
• Long positions or Long means buy 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.
* 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.
* A change of trading interests is when there is a change of direction in the market from ascending to descending or from descending to ascending.
September 24 economic calendar:
Today, the United States will publish its new home sales data, predicting an increase in August. It is worth considering that the data will be published already at the close of the European session at 14:00 Universal time, so the news will be won back only by the West.
Trading plan for EUR/USD on September 23:
The resistance area of 1.1750 puts pressure on buyers, which leads to the formation of stagnation within the borders of 1.1735/1.1750. Here, the best trading tactic is the method of breaking through one or another border of the established range.
Buy positions should be considered after holding the price above the level of 1.1760.
Sell positions should be considered after holding the price below the level of 1.1730.
Trading plan for GBP/USD on September 24:
The correction from the local low of 1.3600 ended in the area of 1.3750, where there was a pullback at the beginning, followed by a stagnation in the range of 1.3710/1.3735. It can be assumed that holding the price below the level of 1.3700 will lead to a gradual recovery of downward interest. This may lead to the pound’s decline towards 1.3685-1.3640.
An alternative scenario will be relevant if speculative mood resumes in the market. In this case, holding the price above the level of 1.3755 in an H4 period will lead to a local movement towards 1.3800.
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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