FX.co ★ Trading plan for EUR/USD and GBP/USD as of September 8

Euro came close to parity, but it had nothing to do with the GDP data of the Euro area for the second quarter, which was better than the previous one. According to reports, the growth rate slowed to only 4.1%, indicating that the region is still away from recession than previously thought.

EUR/USD did not increase immediately after the release of the GDP data, but after a couple of hours, when confidence grew that the European Central Bank will raise interest rates by 75 basis points today. Most likely, this bullish dynamics will extend today as ahead is the board meeting of the Federal Open Market Committee, as well as a speech from ECB Chairman Christine Lagarde. If Lagarde hints at a further tightening of monetary policy, euro will continue to grow. If not, everything will return to normal, and euro will fall again below parity.

GDP (Europe):

All the attempts to keep EUR/USD below 0.9900 failed, so euro slipped back into parity. Most likely, speculation will take place in the market, which is why further growth in the pair is possible. But the overheating of long positions in the short term may ultimately lead to the exit of many players in the market.

GBP/USD hit the 2020 low, but market participants failed to make it stay below. This is why the quote rolled back by 130 pips. In this situation, much will depend on speculators as they have a strong positive correlation between trading instruments.