The new trading week traditionally began with an empty macroeconomic calendar. Important statistics were not published in Europe and the United States. While, there was no trading in the UK due to the funeral of Queen Elizabeth II.
Investors and traders were guided by the information flow, identifying speeches / statements / comments regarding interest rates, inflation and everything related to monetary policy.
Information flow
ECB Governing Council member Pablo Hernandez de Cos said on Monday that interest rates should be raised until inflation is sure to return to its 2.0% target.
The main points of his speech:
- Weak economic growth is not enough to bring inflation back to target levels.
- There is a danger of inflation effects of the second wave.
- Recent reports point to a rapid slowdown in the EU economy.
- Rapid rate hikes to the neutral 2.0% level may be undesirable.
Analysis of trading charts from September 19The EURUSD currency pair showed an upward interest, during which the quote jumped to the value of 1.0050. Despite the temporary shift of trading forces in favor of buyers, there is still a stagnation stage along the parity level for the currency pair.
The GBPUSD currency pair did not manage to stay below the local low of the past week at 1.1350. As a result, there was a gradual increase in the volume of long positions in the pound sterling, which led to the formation of a pullback in the market.
Today, data on the construction sector of the United States will be published, which predicts a decline in all indicators. This is not the best economic signal, but it is likely that market participants will ignore them due to the release of the results of the two-day Fed meeting on Wednesday.
Thus, investors and traders will continue to monitor the incoming information flow, identifying possible speeches / statements / comments regarding interest rates, inflation and everything related to monetary policy.
Time targeting:
U.S. Building Permits Issued (Aug) – 12:30 UTC
U.S. Housing Starts (Aug) – 12:30 UTC
Trading plan for EUR/USD on September 20In this situation, the primary signal of rising interest among traders was received from the market. To confirm it, the quote needs to stay above the value of 1.0050. In this case, movement in the direction of 1.0150 is possible.
Otherwise, the quote will return to the previous cycle of fluctuations along the parity level.
The downside scenario is still relevant in the market, but in order for it to be confirmed, the quote needs to stay below 1.1350 for at least a four-hour period. Until then, traders will see a corrective move as a possible market opportunity. The subsequent increase in the volume of long positions on the pound is expected after holding the price above the value of 1.1450 in a four-hour period.
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.