Here are the details of the economic calendar from October 29:
Europe released its preliminary inflation data last Friday, where consumer prices surged from 3.4% to 4.1% against the forecast of 3.7%. This rapidly growing inflation scares investors, given the silence from the European Central Bank.
At the same time, EU GDP data for the third quarter were published, where the figures coincided with the forecast. The rate of economic growth slowed from 14.2% to 3.7%, which cannot be called a positive factor.
It is possible that the sharp depreciation of the euro is due to inflation data. Initially, there was a confusion about what was happening, and then finally, there was already an action during the US session.
Analysis of trading charts from October 29:
The Euro currency declined by more than 140 points against the US dollar last Friday. This is a very strong price change in a short period of time, which signals a high speculative hype in this period of time.
Analyzing the market cycles, an almost complete recovery of the price relative to the correction move from the pivot point of 1.1524 can be observed. This signals a prevailing downward interest, which is confirmed by the trend.
The British currency rapidly declined after the euro, showing an inertial movement of more than 110 points. As a result, market participants broke through the lower border of the side channel 1.3730/1.3830, and the quote fell below the local low of October 15.
On the daily chart, there is a correctional move from the support level 1.3400, where a change of trading interests appeared in the resistance area of 1.3800/1.3830.
November 1 economic calendar:
Today, the UK Manufacturing PMI is expected to be released. The October data is forecasted to be in line with previous estimates. A similar index will be published in the United States, where its level is predicted to fall in October from 61.1 points to 60.05 points.
Trading plan for EUR/USD on November 1:
In this situation, it can be assumed that there might be a temporary stagnation-pullback relative to the pivot point of 1.1535 due to the euro's high oversold level.
The subsequent signal to sell the euro will occur when the price is kept below the level of 1.1520. This step will lead to a prolongation of the downward trend.
Trading plan for GBP/USD on November 1:
Despite the pound's growing oversold level, it continues to decline. This confirms the signal of a change in trading interests and the recovery of the US dollar relative to the recent correction. Now, the sellers are on the way to the target level of 1.3600, where there may be a slowdown followed by a pullback.
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.