The labor market data from the UK was released yesterday. According to forecasts, the unemployment rate should have remained unchanged, but it rose from 4.7% to 4.8%.
The UK's general unemployment is growing, so the value of the pound should have been actively fallen, but there were some positive moments in the report. Here, the applications for unemployment benefits declined by as much as 115 thousand in June, which is a lot and is considered a positive factor in the improvement of the labor market.
As for the United States, weekly data on applications for unemployment benefits were published, where they saw a decline in their volume.
Details of statistics:
- The volume of initial applications for benefits fell from 386 thousand to 360 thousand.
- The volume of repeated applications for benefits fell from 3.337 thousand to 3 241 thousand.
The US statistics played a positive role in the value of the US dollar.
* 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.
To simply put it, a decline in the number of applications for benefits can lead to a strengthening of the national currency – USD.
Analysis of trading charts from July 15:
The EUR/USD pair returned to the area of the support level of 1.1800, but market participants failed to stay below it, which resulted in a price stagnation.
The trading recommendation on July 15 considered the area of 1.1850/1.1895 as resistance, indicating a possible reversal of the quote. The trading signal for sale coincided and as a result, the quote declined within the predicted coordinate of 1.1800.
* The support level is the so-called price level, from which the quote can slow down or stop the downward course. The principle of constructing this level is to reduce the points of support on the history of the chart, where the price reversal in the market has already occurred earlier.
* 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.
The GBP/USD pair was driven again by speculative interest, as a result of which it was possible to see a series of strong price impulses. The price values of 1.3800 and 1.3900 stood as the borders of the amplitude.
July 16 economic calendar:
Today, Europe will release its inflation data, where consumer prices may decline from 2.0% to 1.9%. It is worth considering that we are dealing with the final data, which was already known on the market based on a preliminary estimate.
If the data is confirmed (1.9%), it will not affect the market in any way, since the submitter has already been taken into account in the quote. But if the indicator turns out to be different, there will be speculative interest, depending on whether the inflation rate in the EU will increase or decrease.
9:00 Universal time - EU inflation
* The consumer price index is prepared by the Statistical Service of the European Union (Eurostat), which determines the change in prices of the selected basket of goods and services for a given period. This indicator is considered a key indicator for assessing inflation. From the point of view of fundamental analysis, an increase in inflation is a positive signal for the national currency, but when consumer prices rise faster than forecasts, this is considered not the best signal, and this can lead to speculative manipulations in the markets.
At 12:30 Universal time, the United States will release its data on the volume of retail sales, where they forecast a slowdown in growth from 28.1% to 14.0% (yoy), but these are still strong figures due to the effect of a low base.
* The volume of retail sales is one of the main economic indicators and an indicator of the change in sales volume in the context of retail trade. In simple words, this indicator reflects the purchasing power of the population.
- The growth in retail sales is a positive signal for the economy and the growth of the national currency.
- The decline in retail sales is a negative signal for the economy and a weakening of the national currency.
* The low base effect is when the growth rate of an economic indicator is explained by its extremely low starting indicator.
Trading recommendation for EUR/USD on July 16, 2021
Looking at the EUR/USD trading chart, one can see a slight price stagnation around the support level of 1.1800. In this situation, an accumulation process of trading forces may arise, which will eventually lead to a new round of acceleration in the market.
To simply put it, the most comfortable trading strategy is breaking through a particular stagnation border of 1.1795/1.1825.
Sell signal
Traders will consider this if the price is kept below the level of 1.1795, in the direction of 1.1770.
Buy signal
Traders will consider this if the price is kept above the level of 1.1825, in the direction of 1.1850.
The accumulation process is price fluctuations in a closed amplitude, where there is often a local acceleration towards the breakdown of one or another stagnation border.
Trading recommendation for GBP/USD on July 16, 2021
As for the trading chart of the GBP/USD, it can be seen that the quote is still within the range of 1.3800/1.3900, where speculative interest is at a fairly high level.
There is no need to rush in this situation. The best entry point will be to keep the price outside a particular border of the amplitude (1.3800/1.3900), which will indicate the next movement.
Sell positions:
Sell positions will be considered if the price is held below the level of 1.3800.
Buy positions:
Buy positions will be considered if the price is held above the level of 1.3900.
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 individual candle in detail, you will see its characteristics of a relative time period: the opening price, the closing price, the 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.
Things to remember:
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 since the market will exist tomorrow, next week, next year, and the next decade.
