Here are the details of the economic calendar for Sept 1:
Yesterday, Europe released its unemployment data, where the expectations of its decline were confirmed. The unemployment rate declined from 7.8% to 7.6% in July. It should be noted that the previous data was revised in favor of growth, that is, from 7.7% to 7.8%.
The news is positive, but the market did not properly react at the time of publication of the data.
The United States will publish the ADP report on the level of employment in the private sector for August, where new jobs were created 374 thousand against 326 thousand in July. The US labor market is showing strong growth, but traders are upset that the recovery is slower. The employment growth was predicted by 613 thousand.
Due to the divergence of expectations, the ADP report exerted strong pressure on dollar positions throughout the currency market. The value of the US dollar was falling.
* The ADP employment report shows the change in the number of employees in the United States. The growth of the indicator has a positive effect on the unemployment rate in the country, as well as on consumer activity, which in turn has an impact on economic growth.
Analysis of trading charts from September 1:
The level of 1.1800 acted as support for the EUR/USD pair. As a result, the volume of long positions increased, and the quote returned to the area of the local high of the correction. It is worth noting that the stagnation in the range of 1.1790/1.1815 served as an accumulation of trading forces, which led to sharp movement at the moment of the breakdown of the upper border.
The trading tactics on September 1 considered the method of breaking through one or another border of the established range (1.1790/1.1815). This approach gave us the opportunity to enter the market at the most optimal price, and most importantly, in the right direction.
Buy positions will be relevant if the price is held above the level of 1.1820. This will open the way towards 1.1845.
As a result, traders made a profit of 25 points, which is $ 25 with a trade volume of 1InstaLot.
The pivot point in the area of 1.3750 for the GBP/USD pair slowed down the decline, which resulted in stagnation, and eventually a rebound towards the resistance level of 1.3800. It should be noted that the market has been experiencing a sideways movement in the range of 1.3730/1.3800 for four consecutive days already. Thus, the correction from August 20 slowed down its formation.
It can be recalled that as early as July 30, there is a downward cycle in the market, where the current correction is a part of it. This means that the downward trend is still relevant in the market.
Long positions or Long means buy positions.
* The accumulation process is price fluctuations in a closed amplitude, where at the moment of the breakdown of a particular stagnation border, a local acceleration in the direction of breakdown often occurs.
* The resistance level is the so-called price level, from which the quote can slow down or stop the upward movement. The principle of constructing this level is to reduce the price stop points on the history of the chart, where the price reversal in the market has already occurred earlier.
Sept 2 economic calendar:
The weekly data on applications for US unemployment benefits will be released at 12:30 Universal time today, where they predict a decrease in their volume. This may support the US dollar if expectations coincide.
Details of statistics:
The volume of initial applications for benefits may fall from 353 thousand to 345 thousand.
The volume of repeated applications for benefits may fall from 2 862 thousand to 2 775 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.
Therefore, a decline in the number of applications for benefits may lead to a strengthening of the national currency – USD.
Trading plan for EUR/USD on September 2:
Euro's high overbought level does not stop speculators, who continue to form a correction from this year's base.
In this case, one should trade on both sides.
Sell positions come from a downtrend that is relevant in the market. In this case, the first entry into the market may occur if the price pulls back from the correction maximum with a target of 1.1800.
Sell positions are considered to maintain an inertial course in the market, when speculators ignore the overbought status. In this case, the maximum possible growth of the euro is the level of 1.1900.
Trading plan for GBP/USD on September 2:
It can be assumed here that the sideways movement within the range of 1.3730/1.380 will remain on the market for some time. Now, it is worth preparing for the upcoming acceleration, trading by the method of breaking through a particular border.
Buy positions can be considered if the price is kept above the level of 1.3800.
Sell positions can be considered if the price is kept below the level of 1.3725.
* Overbought market – a situation that occurs after prices have risen too high and quickly and prices are expected to fall soon. In our case, we are talking about the euro, which has grown quite strongly.
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.
