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Here are the details of the economic calendar from August 18:
The UK's inflation data was released yesterday, where consumer prices fell from 2.5% to 2.0%, which is higher than the 2.3% forecast.
There was no market reaction when the statistics were released.
Europe also released its inflation data, where the figures were in line with the preliminary estimate. The quote has already taken into account the decline in consumer prices from 1.9% to 2.2%. Therefore, there was no reaction in the market.
Analysis of trading charts from August 18:
The EUR/USD pair managed to break through this year's base during an intense decline. The level of 1.1700 lost its support status, which increased the chances of sellers to further weaken the euro.
It should be noted that a downward cycle has been taking place since the beginning of June, weakening the Euro currency by more than 4.5%. Such a large-scale decline leads to a change in trade interests in the market.
The trading plan on August 18 considered the scenario of a subsequent depreciation of the euro if the price was kept below the level of 1.1700.
Since the beginning of the week, the pound has weakened against the dollar by more than 170 points, but this does not stop sellers from increasing the volume of short positions. This situation leads to the recovery of the US dollar against the upward cycle for the pound on July 21-30.
In simple terms, there was a change in trading interests in the market, where the psychological level of 1.4000 served as the starting point.
The trading plan on August 18 indicated the prevailing downward interest in the market.
Short positions or Short means sell positions. Psychological levels are round values (1.2000, 1.3000, 1,4000,1,5000, etc.) that serve as key coordinates in the market, which traders pay special attention to. These levels are often used as support or resistance.* 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 19 economic calendar:
Today, the United States will release its weekly data on applications for unemployment benefits, which is expected to decline in volume.
Details of statistics:
The volume of initial applications for benefits may fall from 375 thousand to 363 thousand.
The volume of repeated applications for benefits may fall from 2,866 thousand to 2, 800 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.
In this case, a decrease in the number of applications for benefits may strengthen the national currency (USD). If the forecast does not coincide with expectations, a backlash may occur.
Trading plan for EUR/USD on August 19:
The local oversold value of the euro is clearly visible, which can lead to a stagnation-pullback relative to the current levels. At the same time, the downward interest remains in the market. The further growth in the volume of short positions will occur once the price is kept below the level of 1.1600 in the daily time frame.
* Oversold market - a situation where prices have fallen too low and quickly. In this case, we are talking about the euro, which has lost almost 100 points from its value in a short period.
Trading plan for GBP/USD on August 19:
Despite the scale of the pound's weakening, there is potential for a further decline in the market. The local low of July 20 (1.3570) serves as the main pivot point for sellers. This level is considered as a point of a possible decline shortly.
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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