Thread: Daily Market Analysis from ForexMart

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Hot forecast for EUR/USD on 31/08/2022​​​​​​​

Today, the reason for the weakening of the US dollar will be preliminary data on inflation in Europe, which should accelerate from 8.9% to 9.1%. And this means that the European Central Bank will actively raise interest rates, which will cause the single currency to strengthen. And it will already pull other currencies with it. Given the high significance of inflation, the published data on employment in the United States, which, by the way, should increase by 180,000, will have little effect.

The EURUSD currency pair was conditionally standing in one place yesterday. The movement took place between the parity level and the variable value of 1.0050. In fact, there was a process of accumulating trading forces on the market, where traders took a break, which in the end can become a lever for speculative jumps.

The RSI H4 technical instrument is moving in the upper area of the 50/70 indicator, which, from the point of view of indicator analysis, indicates the prevailing upward interest in the market. Take note that the quote has been moving in the 0.9900/1.0050 horizontal channel for the second week already. Thus, the signal from the RSI H4 indicator may be unstable.

MA moving lines on Alligator H4 have many intersections, which corresponds to the flat stage. Alligator D1 is directed downwards, there is no intersection between the MA lines. This signal from the indicator corresponds to the direction of the main trend.

Expectations and prospects
Despite the existing stagnation, the quote is still moving within the sideways range of 0.9900/1.0050. For this reason, the main decisions will be made by traders after one of the values of the current range is surpassed.

An upward movement in the currency pair is taken into account after keeping the price above the value of 1.0050 in a four-hour period.

A downward trend should be considered after keeping the price below 0.9900 in a four-hour period.

Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. Indicators in the medium term are focused on a downward trend.

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Hot forecast for EUR/USD on 02/09/2022

Yesterday, the single currency showed a rather impressive decline, falling below parity again. And it started during the European trading session, under the influence of the actual European macroeconomic statistics. In particular, the final data on the index of business activity in the manufacturing sector turned out to be worse than the preliminary estimate, and fell from 49.8 points to 49.6 points. While the preliminary estimate showed a decrease to 49.7 points. In addition, the data on unemployment also turned out to be not the best, although formally, it fell from 6.7% to 6.6%. But in fact, it remained unchanged, as the previous data were revised upwards.

Unemployment rate (Europe):

But in the United States, the final data on the index of business activity in the manufacturing sector turned out to be better than the preliminary estimate, which showed a decrease from 52.2 points to 51.3 points. In fact, it dropped to 51.5 points. However, the strengthening of the dollar is still somewhat surprising, as the data on applications for unemployment benefits do not inspire optimism. Of course, the number of initial requests decreased by 5,000. But the number of repeated requests increased by 26,000. And this is quite a lot.

Number of retries for unemployment benefits (United States):

It is possible that the dollar's growth is purely speculative in anticipation of today's release of the report of the United States Department of Labor. And while the unemployment rate is projected to remain unchanged, data on employment change clearly indicate a high potential for its growth. In addition, 310,000 new jobs should be created outside of agriculture, against 528,000 in the previous month. Such a strong decline in the rate of job creation clearly hints that the US labor market is losing momentum, and the situation is starting to worsen, which will be the reason for a sharp weakening of the dollar.

Number of new non-agricultural jobs (United States):

The EURUSD currency pair showed local speculative interest in short positions yesterday. As a result, the quote fell below the parity level, having almost reached the lower boundary of the sideways range of 0.9900/1.0050.

The technical instrument RSI H4 crossed the middle line 50 from top to bottom during the downward momentum. As a result, the indicator settled in the lower area of 30/50, which indicates the downward mood of market participants. It should be noted that the signals from RSI H4 are of a variable nature due to the fact that the quote, as before, is moving within the sideways formation.

MA moving lines on Alligator H4 have many intersections, which corresponds to the flat stage. Alligator D1 is directed to the downside, there is no intersection between the MA lines. This signal from the indicator corresponds to the direction of the main trend. In this case, the strengthening of the downward signal will occur at the moment when the MA (D1) lines are kept below the parity level.

Expectations and prospects

The convergence of the price with the lower limit of the flat 0.9900 led to an increase in the volume of long positions, as a result, a rebound appeared on the market. Despite the variable speculative interest, the quote is still in the sideways on the basis of a downward trend. Thus, the work can be built on the basis of two tactics: Rebound or breakdown relative to one or another control border.

Concretize the above

The bounce tactic is seen by traders as a temporary strategy.

The breakout tactic is considered the main strategy because it can indicate the subsequent price move.

Complex indicator analysis in the short-term and intraday periods have a variable signal due to the current flat. At this time, the indicators indicate a long position due to the price rebound from the lower border of the flat. Indicators in the medium term are focused on a downward trend.

Tips for beginner traders in EUR/USD and GBP/USD on September 5, 2022

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.

Time targeting:

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.

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Tips for beginner traders in EUR/USD and GBP/USD on September 6, 2022

Details of the economic calendar for September 5

Data on indices of business activity in the services sector in Europe and the UK were published, which came out worse than expected.

Details of statistical indicators:

Eurozone services PMI fell from 51.2 to 49.8 points against the expectation of 50.2 points. The composite index fell from 49.9 to 48.2 points.

The euro was already heavily oversold at the time of the release of the data, so it was difficult to fall further.

UK services PMI fell from 52.6 to 50.9 points, with forecast of a decline to 52.5 points. The composite index fell from 52.1 to 49.6 points.

The pound sterling, like the euro, was oversold; there was no reaction to the statistics.

Data on retail sales in the euro area were also published: its rate of decline slowed down from -3.2% to -0.9% YoY. Despite the fact that the data came out worse than expected (-0.7%), the euro ignored them.

The reason for the lack of response to statistical indicators arose due to the commodity market.

Yesterday, with the opening of trading, there was a sharp increase in the cost of gas in Europe, which 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.

Speculators worked out this information flow in the form of a sell-off of the euro, where, through a positive correlation, it followed the euro and the pound sterling.

As soon as the price of gas began to recover relative to the morning jump, the euro began to strengthen, followed by the pound.

Analysis of trading charts from September 5

The EURUSD currency pair opened a new trading week with an intensive decline, during which the quote temporarily fell below 0.9900. The speculators failed to stay outside the control value, which resulted in a technical pullback.

The GBPUSD currency pair, through a positive correlation with EURUSD, first rushed down, almost reaching the 2020 low, and then moved into the pullback stage.

Economic calendar for September 6

The United States is coming off a three-day holiday today, and service sector PMI data will be released.

In the UK, data on the index of business activity in the construction sector will be released, where they predict its decline. Not the best signal for the pound sterling, but it is worth considering that it is already oversold in the market.

Time targeting:

UK Construction PMI (Aug) – 08:30 UTC

US Services PMI (Aug) – 13:45 UTC

Trading plan for EUR/USD on September 6

Despite the speculative activity, the quote is still within the range of 0.9900/1.0050. Thus, traders are guided by the borders of the flat, working according to the method of breakdown or rebound from the given values.

Trading plan for GBP/USD on September 6

With the pound losing more than 800 pips in value in three weeks, a pullback/correction was brewing in the market due to short overheating. In this situation, holding the price above 1.1620 will lead to the subsequent strengthening of the pound towards 1.1750.

As for the prolongation of the downward trend, it is necessary to keep the price below the value of 1.1400 in the daily period.

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Tips for beginner traders in EUR/USD and GBP/USD on September 7, 2022

Details of the economic calendar for September 6

The further aggravation of the energy crisis in Europe puts pressure on the markets, which does not allow the euro to move into the stage of a full correction.

German Chancellor Olaf Scholz said yesterday that the energy crisis will last for several more years. This statement caused the euro to accelerate its decline.

Meanwhile, UK's construction Purchasing Managers' Index (PMI) was published, which rose to 49.2 instead of the expected decrease from 48.9 to 48.0. However, the market ignored the statistics.

During the American trading session, the US services Purchasing Managers' Index (PMI) was published, which fell more than expected from 47.3 to 43.7. Again, there was no reaction to the statistical data.

Analysis of trading charts from September 6

The EURUSD currency pair is stubbornly trying to prolong the downward trend, as indicated by a number of attempts by traders to stay below the 0.9900 level in the daily period. There is no clear signal of prolongation for the Tuesday period.

The GBPUSD currency pair, after a short pullback, again rushed down towards the local low of 2020 (1.1410). This move indicates the continuing downside mood among traders in the market.

It is worth noting that the pound sterling has a positive correlation with the euro. Thus, we observe identical cycles in the market.

Economic calendar for September 7

Today, the publication of the third estimate of Eurozone GDP is expected, where there will be no reaction in the market if the data coincides with the previous two estimates. If there is a discrepancy in the statistical data, then a speculative activity may appear depending on the indicators.

Time targeting:

EU GDP – 09:00 UTC

Trading plan for EUR/USD on September 7

Market participants still expect the price to hold below 0.9900 in the daily period. This move will indicate the possibility of further weakening of the euro towards 0.9500. It is worth considering that a variable level of 0.9850 stands in the way of the downward cycle. Thus, a confirming signal about the downward move will be received after its breakdown.

The upward scenario considers the absence of holding the price beyond the control values. In this case, another rebound is possible, with the price returning above the parity level.

Trading plan for GBP/USD on September 7

In order for a signal to prolong the long-term downward trend to appear, the quote needs to be firmly held below 1.1400 in the daily period.

In the opposite case, it is impossible to exclude the scenario of a price rebound from the 2020 low area with a subsequent amplitude of 1.1450/1.1600.

Hot forecast for EUR/USD on 08/09/2022

The single currency has come close to parity, and this has nothing to do with the third assessment of the eurozone GDP in the second quarter. Which, by the way, turned out to be somewhat better than the previous one, which showed a slowdown in economic growth from 5.4% to 3.9%. According to the latest data, the growth rate slowed down to only 4.1%. So Europe is a little further away from recession than previously thought. But the euro did not immediately start rising after the release of the data, but only after a couple of hours. This happened amid growing confidence that the European Central Bank will raise the refinancing rate by 75 basis points today. It is quite obvious that this is the main driving force and the central event of the week. More important than this is the upcoming board meeting of the Federal Open Market Committee. The very fact of raising the refinancing rate, although it will lead to further growth of the single currency, is not strong. Yes, and not long. In fact, much more important is what ECB President Christine Lagarde will say during the subsequent press conference. If Lagarde announces a further significant tightening of monetary policy, then the euro's growth will be quite serious and prolonged. Otherwise, everything will return to normal pretty quickly, and the single currency will again fall below parity.

Change in GDP (Europe):

The EURUSD currency pair tried to overcome the control value of 0.9900 for three consecutive days, but the market participants failed to stay below it in the daily period. As a result, there was a price rebound, which led to a reverse move towards the parity level.

Technical instruments RSI H4 jumped above 60 due to the pullback stage. This is the highest indicator since August 12. In the case of further growth in the value of the euro, there may be a premature overheating of long positions. At the same time, RSI D1 is moving in the lower area of the indicator, which corresponds to a downward trend in the medium term.

Moving MA lines on Alligator H4 have primary intersections with each other. This signal emerged due to a sharp price momentum during the past day. In this case, it indicates a slowdown in the downward cycle. The Alligator D1 indicator line is directed downward, which corresponds to the direction of the main trend.

Expectations and prospects

Despite the possible overheating of long positions in short-term time periods, speculators can still send the euro up due to the results of the ECB meeting. In this case, local price movement above 1.0050 is not excluded.

In the work, it is worth considering that speculative hype is not the basis for a stable price movement. In the event of a slight change in the mood of speculators, mass consolidation of long positions is possible, which will lead to a reverse price movement.

Comprehensive indicator analysis in the short-term and intraday periods indicate an upward signal, due to the rollback stage from the value of 0.9900. In the medium term, technical instruments, as before, are focused on a downward trend.