Details of the economic calendar for September 12
UK industrial production data showed a slowdown in growth from 2.4% to 1.1%. This is a negative factor for the country's economy, but based on the behavior of the price, the pound ignored the statistical indicators.
Speculators focused on the speeches of the representatives of the European Central Bank. Their comments confirmed the "hawkish" forecast regarding further rate hikes. Experts are sure that the ECB intends to raise rates by 75 basis points in October.
Based on expectations, the market experienced a sharp rise in the value of the euro.
The main theses of the speeches of the ECB representatives:
Joachim Nagel, ECB:
- The rate increase during the September meeting brought us one step closer to the neutral level—it is necessary to raise rates further;
- Inflation is very high—it can reach 10% YoY;
- It is possible that the inflation rate will peak in December and will gradually decrease in 2023;
- Inflation could reach 6.0% YoY next year.
Frank Elderson, ECB:
- All members of the ECB intend to return inflation to 2.0% YoY—this is a priority;
- The ECB will continue to raise interest rates;
- A period of recession is possible but may not be long;
- Stable prices are an important medium- and long-term growth factor for good prospects for the EU.
Luis de Guindos, ECB:
- The 75 basis point rate hike in September was made to reduce inflation expectations;
- The ECB should help the EU cope with the energy shock;
- Higher interest rates could slow down economic growth;
- The regulator must direct all its tools to restore price stability;
- No idea where the ECB rate ceiling will be.
Analysis of trading charts from September 12
The EUR/USD currency pair strengthened in value by about 300 points from the lows of the downward trend. This movement is classified as corrective, during which the quote locally rose to the area of 1.0200.
The GBPUSD currency pair rushed up after the euro. As a result, the corrective move from the local low of 2020 was prolonged, where the British currency strengthened by about 300 points in less than a week.
Economic calendar for September 13
At the opening of the European session, data on the UK labor market was published, which came out much better than forecasts. The unemployment rate fell from 3.8% to 3.6%, while forecast assumed the previous level to remain. The negative factor in the report is the increase in the number of claims for unemployment benefits by 6,300, while their reduction is forecast by 13,200. At the same time, employment in the country grew less than the forecast, by only 40,000.
Despite the negative factors, the decrease in the unemployment rate in the country covers everything. As a result, the pound sterling received support in the market from buyers.
The main event of the day and the whole week is the data on inflation in the United States. Based on the indicators, investors and traders will be guided by the Fed's possible steps during the next meeting. In simple words, a gradual decline in inflation may push the regulator to slow down the rate of increase in the refinancing rate, and this, in turn, will lead to a noticeable weakening of dollar positions.
Based on forecasts, inflation in the US may slow down from 8.5% to 8.1%.
Time targeting:
US Inflation – 12:30 UTC
Trading plan for EUR/USD on September 13
In this situation, stable price retention above the level of 1.0150 will eventually lead to a breakdown of the value of 1.0200. This step allows for the subsequent formation of a corrective move that does not violate the integrity of the downward trend.
Trading plan for GBP/USD on September 13
In this situation, the upward cycle is still relevant in the market. Therefore, the prolongation of the current corrective move is not excluded, where at first, the price will hold above the level of 1.1750 and then move towards 1.1800–1.1850.
What is shown 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.
