Here are the details of the economic calendar from July 9:
Last Friday, the UK released its data on the volume of industrial production, where there is an increase of 0.8% in monthly terms against the expected 1.2%. As for the annual terms, the growth rate slowed down from 27.5% to 20.6%, but the indicators are still very high due to the low base effect.
* Industrial production reflects the change in production volumes at English enterprises in the reporting month compared to the same month of the previous year. The calculation of the indicator takes into account all branches of production: industry, mining, and processing of minerals, energy production, water resources, and waste management.
* The low base effect is when the growth rate of an economic indicator is explained by its extremely low starting indicator.
Analysis of trading charts from July 9:
The EUR/USD pair entered the technical correction stage after a failed attempt to break through the support level of 1.1800. The quote was able to return to the levels of the beginning of the trading week, that is, in the price area of 1.1880/1.1895.
In simple words, sellers failed to break through an important price level from the first time, instead, there was a decrease in the volume of short positions and an increase in the volume of long positions, which was the result of a technical correction.
The trading recommendation on July 9 considered the correction stage, but since this process was already in the active phase, traders were recommended to increase the volume of a buy position above the 1.1900 mark.
* A technical correction is when a quote changes the direction of the market on a short-term basis without the influence of fundamental analysis on it. This phenomenon often occurs in the market at the time of a long-term strengthening or weakening of the quote.
- Short positions or Short means sell positions
- Long positions or Long means buy positions
The GBP/USD pair managed to accumulate trading forces after a short stagnation last July 8, which ultimately led to a speculative growth on July 9. The change in the quote is very similar to the technical correction, where the previously known support area of 1.3730/1.3750 acted as a pivot point in the market.
The trading recommendation on July 9 considered buy positions above the level of 1.3800.
July 12 economic calendar:
There are no significant statistics from the EU, Britain, and the United States today. Therefore, the market will be focused on information flow, as well as on technical analysis.
In most cases, Monday will not contain important statistics in the economic calendar, but this does not mean that the market will stand in one place on this day.
Trading recommendation for EUR/USD on July 12, 2021
Looking at the EUR/USD trading chart, one can see a slowdown process within the resistance area of 1.1880/1.1895, which is a reflection of the price stagnation from July 1, 5, and 6, where the volume of long positions declined.
Sell signal
In this case, traders are focused on reducing the volume of long positions and rebounding from the resistance area, which can eventually lead to a price movement towards the level of 1.1800.
Buy signal
Traders consider the breakdown of the resistance area of 1.1880/1.1895, which will lead to further correction. There is no need to hurry. We are considering buy positions with a delay, above the level of 1.1900, with a prospective move to the range 1.1950-1.2000.
* 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.
Trading recommendation for GBP/USD on July 12, 2021
As for the trading chart of the GBP/USD, it shows that the market has developed a local overbought status due to the sharp price change last Friday. This led to a stagnation around the level of 1.3900.
Sell signal
It will be considered as a trading scenario once a partial reduction occurs after a sharp growth in the volume of long positions, which will lead to a pullback. To simply put it, traders are guided by a partial recovery relative to the upward momentum last Friday.
Buy signal
It is considered by traders as a prolongation of the existing correction, but it is advised to enter the market above the level of 1.3950, with a prospect of 1.4000.
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.
