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Here are the details of the economic calendar from August 19:
The United States released its data on applications for unemployment benefits, where they recorded a decrease in their volume.
Details of statistics:
The volume of initial applications for benefits fell from 377 thousand to 348 thousand.
The volume of repeated applications for benefits fell from 2 899 thousand to 2 820 thousand.
* Applications for unemployment benefits reflect the number of currently unemployed citizens and those receiving unemployment benefits. This indicator is considered to be the state of the labor market, where the growth of the indicator negatively affects the level of consumption and economic growth. The reduction of applications for benefits has a positive effect on the labor market.
The decrease in the number of applications for benefits has played in favor of the US dollar.
Analysis of trading charts from August 19:
The EUR/USD pair slowed down its downward movement after updating this year's local low. However, it should be remembered that the main feature is considered to be the price holding below the reference level of 1.1700. This increases the chances of a subsequent depreciation of the euro.
It is worth noting that market participants tested the level of 1.1700 for strength during the period of September 25 and November 4. As a result, there was a deviation to the value of 1.1600. Thus, traders currently pay attention to the value of 1.1600, reducing the volume of short positions. To understand what we are talking about, it is suggested to open the EUR/USD pair on the daily chart and analyze the dates of September 25, November 4, and the current day.
The trading plan on August 19 considered the scenario of a subsequent decline of the euro, but only after the price was kept below the level of 1.1600.
The GBP/USD pair continued its active decline, having an inertial move of more than 250 points since the beginning of the week. Such a rapid movement led to an almost complete restoration of the downward interest relative to the upward cycle in the period of July 21-30.
In simple terms, there was a change in trade interests in the market, where sellers took a leading position.
The trading plan on August 19 indicated a predominant downward interest with a target of 1.3570.
Short positions or Short means sell positions.* A change of trading interests is when there is a change of direction in the market from ascending to descending or from descending to ascending.
August 20 economic calendar:
Today, Britain released its data on retail sales, where there was a decrease in their volume from 9.7% to 2.4% (y/y). In monthly terms, the decline was -2.5% during the month of July.
The data is negative, but the market did not show a proper reaction at the time of their publication. Perhaps, the pound is already heavily oversold, which does not allow sellers to increase the volume of short positions. At the same time, the reaction may be delayed.
* 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.
Trading plan for EUR/USD on August 20:
Currently, the quote has a stagnation stage just below the control level of 1.1700. The downward interest is still observed in the market, but the main volume of short positions will arise when the price is kept below the level of 1.1600 in the daily time frame.
In this case, the medium-term upward trend from the spring of last year will be at risk of changing trading interests.
Trading plan for GBP/USD on August 20:
The market has an oversold status due to the sharp decline, which can lead to stagnation and a technical pullback. It is worth considering that the local low of July 20 (1.3570) is considered as the main support level, which may well become a variable point.
* 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.
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