23.08.202111:10 Forex Analysis & Reviews: Trading plan for starters of EUR/USD and GBP/USD on August 23, 2021

Here are the details of the economic calendar from August 20:

The UK's retail sales data were published, where they recorded a decline in their volume from 9.7% to 2.4% (y/y). In monthly terms, the decline during the July period was -2.5%.

The data is negative, but the market did not show proper reaction at the time of its publication.

* The volume of retail sales is one of the main economic indicators, which is an indicator of the change in sales volume in the context of retail trade. In simple words, this indicator reflects the purchasing power of the population

Analysis of trading charts from August 20:

The EUR/USD pair temporarily slowed down the downward movement after updating this year's local low. This led to a reduction in the volume of short positions and a pullback to the previously broken level of 1.1700.

Such price behavior often occurs in the market when a pullback occurs at the moment of breaking an important level. This is regarded by traders as a regrouping of trading forces before further movement.

The trading plan on August 20 considered the scenario of a subsequent depreciation of the euro, but only after the price was kept below the level of 1.1600. Until this moment, the market may experience stagnation, pullback or correction.

Last week, the GBP/USD pair lost more than 260 points in value during the sharp decline. This led to the convergence of the price from the local low on July 20, where there was a reduction in the volume of short positions.

The trading plan on August 20 indicated a decline, which enabled traders to hold positions until the base of July 20.

August 23 economic calendar:

The preliminary data on the purchasing managers' index in Europe, the United Kingdom and the United States for August, are expected to be released today.

Details of statistics:

8:00 Universal time - Index of purchasing managers in the European services sector: Prev. 59.8 pips; Forecast 59.7 points.

8:00 Universal time - Index of purchasing managers in the manufacturing sector in Europe: Prev. 62.8 pips; Forecast 62.4 points.

EU purchasing managers' composite index could be reduced from 60.2 to 60.1

8:30 Universal time - UK Service Sector Purchasing Managers Index: Prev. 59.6 pips; Forecast 58.7 points.

8:30 Universal time - UK Manufacturing Purchasing Managers Index: Prev. 60.4 pips; Forecast 60.4 points.

13:45 Universal time - Index of purchasing managers in the US services sector: Prev. 59.9 pips; Forecast 59.9 points.

13:45 Universal time - Index of purchasing managers in the manufacturing sector of the United States: Prev. 63.4 pips; Forecast 63.4 points.

The US purchasing managers' composite index may remain unchanged.

Trading plan for EUR/USD on August 23:

The correction returned the quote above the level of 1.1700, while the downward interest is still relevant among market participants. There are price levels of 1.1720 and 1.1760 as a possible resistance on the path of correction, relative to which a new growth in the volume of short positions is possible.

Therefore, the end of the correction will eventually lead to the zeroing of the existing low - 1.1664.

Trading plan for GBP/USD on August 23:

The pound's high oversold level led to a technical correction, but this did not become the stage of completing the decline. Market participants still consider the downward cycle as the main prospect, but the volume of short positions will arise at the time of updating the local low of July 20 - 1.3570.

* Oversold market – a situation where prices have fallen too low and quickly. In this case, we are talking about the pound sterling, which has lost almost 250 points from its value in a short period.

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.

Golden Rule: It is necessary to figure out what you are dealing with before starting to trade with real money. Learning to trade is so important for a novice trader because the market is constantly dynamic and it is important to understand what is happening.