Yesterday's economic calendar had enough statistical data to interest traders in possible actions on the market.
Here's the details of the economic calendar on April 8:
The United Kingdom is the first one that made a report. They published the index of business activity in the construction sector for March, which strongly rose from 53.3 points to 61.7 points, against the expected 54.6 points.
Definition:
The Royal Institution of Purchasing and Supply in partnership with Markit Economics hosts the Construction PMI. This indicator assesses the business climate and the situation in the construction sector in the UK. The growth of the indicator is considered a positive signal for the national currency.
The pound's reaction to the statistics was different from the fundamental justification, since the value of the British currency was declining at the time of publication, and this suggests that speculative interest associated with short positions (sell positions) in the market prevailed among traders.
In turn, Europe released its producer prices, which increased by 1.5% in February, against the expected growth of 1.4%. The indicators are very good, but the market ignored the fundamental analysis again, and the euro quote remained in one place at the time of publication of the statistics.
Definition:
Producer price index is prepared by the statistical office of the European Union and reflects the inflation rate for goods sold or produced in the Eurozone. The growth of the index is considered a positive signal for the national currency.
Lastly, the United States published its data on claims for unemployment benefits on a weekly basis. This time, fundamental analysis coincided with theory.
It was predicted that the volume of initial and repeated applications would fall, but it actually increased, which disappointed investors.
- Volume of initial applications for benefits increased from 728 thousand to 744 thousand.
- Volume of repeated applications for benefits increased from 3 750 thousand to 3 734 thousand.
Definition:
Data on benefit claims determines the state of the United States labor market. An increase in the number of applications indicates the weakness of the labor market, which negatively affects the US dollar, while a decrease in the number of applications indicates the recovery of the labor market and the growth of the US dollar.
Analysis of trading charts from April 8:
The Euro currency (EURUSD) managed to show local upward interest again during the last day, which eventually led to an update of the high of April 7 – 1.1814. The upward activity has been taking place for 7 trading days, which has led to more than 200 points of movement in favor of the euro.
In terms of the trading recommendation, the quote locally broke the level of 1.1815 considering buy positions, which brought us a profit around 12 points for a while, but in the end, there was another stagnation with a pullback.
In turn, the British currency (GBPUSD) conditionally stood in one place yesterday, having a variable amplitude in the range of 1.3720/1.3781. In fact, market participants still felt a foothold relative to the area of 1.3700/1.3720, which reflected the local low of March 30.
We studied the issue of the subsequent decline on April 8. But to confirm the signal, market participants needed to keep the quote below 1.3700.
Trading recommendations for starters of EUR/USD and GBP/USD on April 9, 2021
Today, the United States will publish its data on producer prices, where they are forecast to rise from 2.8% to 3.8%.
Definition:
The Producer Price Index is prepared by the Bureau of Labor Statistics of the US Department of Labor. The report calculates the average change in wholesale prices determined by manufacturers at all stages of production. The growth of the indicator may lead to the strengthening of the national currency, namely the US dollar.
Looking at the EUR/USD trading chart, it shows that the quote is actively returning to the levels of the recent stagnation 1.1865/1.1880, but it is too early to talk about the continuation of the downward interest.
To confirm the sell signal in the market, the quote must hold below the level of 1.1860 for a four-hour interval. Otherwise, it is unlikely to exclude the next upward spiral towards the borders of the psychological area of 1.1950/1.2000/1.2050.
As for the trading chart of GBP/USD, it can be seen that the expectations regarding the downward development are gradually being confirmed in the market, where the quote has already managed to break through the local low (1.3705) of March 30.
If the price is kept below the level of 1.3669, the prolongation of the main correctional movement from the high of the medium-term trend 1.4224 ---> 1.3669 is not excluded in the H4 time frame.
In this case, the prospect of price development may lead market participants to the coordinates 1.3600-1.3570.
