FX.co ★ Trading plan for EUR/USD and GBP/USD on September 30, 2021

Europe's energy crisis has been the main driving force on the market, but yesterday, the information background on this issue clearly disappeared. In particular, there were simply no new introductions. However, the situation with the US national debt came to the fore. It's just that the market behaved quite strangely because the US dollar was actively growing, despite the increasing potential of declaring a default or at least a shutdown. All this looks like primary speculation and the practical implementation of one of the variations of the classic saying: buy on rumors - sell on facts. After all, the Democrats and Republicans had to come to some kind of agreement no later than September 30; or else, there would be nothing left to finance the state budget after that.

The situation escalated day by day, and last night, the leader of the Democratic majority in the Senate said that the parties had agreed on a temporary increase in the public debt limit in order to avoid not only default, but also paralysis of all state structures. A Senate vote on this issue is scheduled for today. There is no doubt that it will go well, after which lawmakers will have until December 3 to adopt a new budget and a limit on public debt. Thus, it seems that the situation has somewhat normalized, or at least the worst has been avoided. Therefore, the general growth of the US dollar is not surprising.

At the same time, the decline in the pound was an excellent demonstration of the fact that any macroeconomic data has faded into the background and few people are interested. For example, yesterday's data on the lending market did not prevent the further rapid decline of the pound, although the data turned out to be much better than forecasts. Here, the volume of mortgage lending rose by 5.3 billion pounds instead of the expected 3.5 billion pounds. The volume of consumer lending, which was supposed to grow by 0.2 billion pounds, increased by 0.4 billion pounds. The only thing that could disappoint was the number of mortgage loans approved, of which there were 74.5 thousand instead of 75.0 thousand.

In addition, the final data on UK GDP for the second quarter was published this morning, which suddenly showed a change in the recession of the economy by -6.1% with an increase of 23.6%, whereas, according to preliminary estimates, growth should have been only 22.2%. But despite such good data, the pound is not growing but declining. Apparently, the news about the agreements between Republicans and Democrats only increases the attractiveness of the US dollar, while energy problems in Europe have not gone away. Relative to this, three more energy companies have declared bankruptcy in the United Kingdom.

GDP growth rates (UK):

The final GDP data for the second quarter will also be published in the United States, and they should confirm the acceleration of economic growth from 0.5% to 12.2%. But due to the fact that the data is likely to coincide with the preliminary assessment, it is definitely not worth waiting for some kind of market reaction.

In many ways, a similar result is possible with data on applications for unemployment benefits. On the one hand, the number of initial requests should decline by 16,000, while the number of repeated requests should increase by 2,000. The changes themselves are quite small, and they are multi-directional, so they will balance each other out. And to some extent, this is even for the best, since all attention will still be focused on the vote in the Senate.

The number of re-claims for unemployment benefits (United States):

The EUR/USD pair first broke through the local low (1.1664) of August 20 during a sharp decline, and then completely approached the low (1.1664) of November 2020. Speculative hype ignored the high level of oversold, which allows for further weakening of the euro if the price is kept below the level of 1.1590. Otherwise, there will be a technical pullback.

The GBP/USD pair showed even stronger downward interest, which resulted in the quotes' decline by almost 300 points. The pivot point is 1.3400, relative to which there is a stagnation-pullback. A further increase in the volume of short positions is expected after the price is kept below the level of 1.3400. Until that moment, the quote will be in the pullback stage.