Details of the economic calendar for September 2
European Union Producer Price Index came out with a significant margin, rising from 36.0% to 37.9%. This news stimulated the euro to rise against the dollar.
The main event of the past week was the United States Department of Labor report, which slightly surprised market participants. The unemployment rate was forecast to remain unchanged at 3.5%. However, unemployment in the US rose to 3.7%, which was a catalyst for a local sell-off of the dollar, yet this is a possible signal for the Fed to take some easing measures. There is one important remark in this reflection, the regulator is ready to turn a blind eye to many things in order to overcome rising inflation.
Meanwhile, jobs created outside of agriculture came out in line with the consensus forecast, 315,000.
The reaction of the US dollar took place within the framework of speculation. In the beginning there was a sale and then a buy-off.
Analysis of trading charts from September 2
The EURUSD currency pair ended last week with an intense downward move. As a result, there was an inertial movement in the market for the US dollar, which returned the quote to the level of 0.9900.
The GBPUSD currency pair resumed its decline after a short stop. This step led to a subsequent update of the low of the medium-term trend, where only a few points remained to pass before the bottom of 2020.
Economic calendar for September 5
The new trading week starts with a holiday in the United States. The key player of the financial market will return on Tuesday. Trading volumes may decline at first.
As for statistical data, the publication of the final indicators on the index of business activity in the services sector in Europe and the UK is expected. If the data coincide with the preliminary assessment of the reaction in the market, it is not worth waiting. At the same time, Eurozone retail sales data is to be published. Its rate of decline may slow down, which is a positive signal for the euro.
USA - Labor Day (holiday)
EU Services PMI – 08:00 UTC
UK Services PMI – 08:30 UTC
EU Retail sales volume – 09:00 UTC
Trading plan for EUR/USD on September 5
With the opening of the European session, a local level of 0.9900 appeared. The sale of the euro was associated with a sharp jump in gas prices in Europe. At the opening of trading, prices jumped by 30%, to $2,800 per thousand cubic meters.
The reason for the increase in the cost of gas lies in the message of Gazprom on Friday evening that the maintenance of the only working turbine of SP-1 revealed "gross violations" and the gas pipeline will not work without their elimination.
In order to confirm the signal about the prolongation of the long-term downward trend for the euro, the quote must be kept below the level of 0.9900 steadily in the daily period. In this case, a path will open in the direction of 0.9850–0.9500.
Otherwise, the amplitude 0.9900/1.0150 has every chance for further formation.
Trading plan for GBP/USD on September 5
Despite the growing oversold level of the pound sterling, the market remains an inertial course, where speculators ignore the overheating of short positions in vain. The low of 2020 (1.1410) may play as support on the sellers' path.
In this situation, traders will consider two possible options for price development:
The first scenario comes from a rebound from the 2020 local low area. In this case, an increase in the volume of long positions is possible, which at the beginning will slow down the downward cycle, after which a rebound will occur.
The second scenario considers the lack of reaction of traders to technical signals about the oversold pound and the support level. In this case, holding the price below 1.1400 in the daily period will lead to a prolongation of the long-term trend.
What is shown 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.
Relevance up to 09:00 2022-09-06 UTC+2 Company does not offer investment advice and the analysis performed does not guarantee results. The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.