Details of the economic calendar for August 19
Retail sales in the UK unexpectedly rose 0.3% in July from the previous month, based on data from the Office for National Statistics (ONS). Year-on-year figures reflected a slowdown in the rate of decline from -6.2% to -3.0%.
Retail sales adjustment did nothing to help the British pound, which continued to lose ground on the market.
At the end of last week, many heads of the Federal Reserve spoke, one after another pointed to a further increase in the interest rate. Their fears about the economic situation in the country and indications that the Fed should continue to move hard at a given rate could well accumulate dollar positions in the market.
Theses of the heads of the Fed
• San Francisco Fed President Mary Daly:
- it is appropriate to raise the Fed rate by 0.5%–0.75% in September
- raise the rate a little above 3%
- it's too early to talk about the victory over inflation
• St. Louis Fed President James Bullard:
- the Fed still has a lot of work to fight inflation
- the Fed can reduce inflation in 18 months
- the Fed should not hesitate to raise rates
- prefers a 0.75% Fed rate hike in September
- rate target = 3.75%–4% by the end of 2022
- too early to speculate about the Fed's rate cut
• Minneapolis Fed President Neel Kashkari:
- Not sure that the US economy can avoid recession and the Fed to lower inflation without triggering a recession
• Richmond Fed President Thomas Barkin:
- there are signs of a slowdown in the economy
- there is a risk of a recession on the way down to inflation to a level of 2%
Analysis of trading charts from August 19
The EURUSD currency pair significantly increased the volume of short positions on the euro after overcoming the control values of 1.0150 and 1.0100. This led to an acceleration of the downward course towards the parity level (1.0000).
The GBPUSD currency pair passed about 250 points during the intensive downward movement at the end of last week. As a result, the quote came close to the area of the local low of the medium-term trend.
Based on the analysis of a basket of currencies (EURUSD, GBPUSD, USDJPY, USDCHF, USDCAD, AUDUSD, NZDUSD), there is a general increase in dollar positions in the market.
Economic calendar for August 22
Monday is traditionally accompanied by an empty macroeconomic calendar. Important statistics in Europe, the United Kingdom, and the United States are not expected.
Thus, investors and traders will focus on the information flow and work out technical analysis.
Trading plan for EUR/USD on August 22
Despite the continued downward sentiment among market participants, the parity area is putting pressure on sellers. This impact may well lead to a slowdown in the downward cycle, leading to a pullback or price stagnation.
We concretize the above:
The pullback stage from the parity level area (1.0000/1.0050) may return the quote to the previously passed value of 1.0100.
Price stagnation refers to stagnation along the parity level area prior to market speculation.
Trading plan for GBP/USD on August 22
Taking into account the overheating of short positions on the pound sterling and the area of support 1.1750/1.1780, we can assume that the quote will move into the technical roll-out stage. If the forecast coincides, the quote may well head towards the values of 1.1880/1.1900.
If the downward interest persists in the market, and the signal about the oversold pound is ignored by speculators, then it is not excluded that the price will come close to the 1.1760 mark.
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.
