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09.09.202109:46 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on September 9, 2021

Yesterday, the currency market showed quite low activity, which is mainly due to a completely empty macroeconomic calendar. The US dollar increased, albeit insignificant. The exception was the Euro currency, which showed a slightly more noticeable decline. With this decline, the euro actually caught up with the rest of the currency market, since it was the only currency that was able to hold its positions a day earlier. But judging by its behavior yesterday, investors believe more in the prospects of the US dollar and the American economy.

Today, the fate of the entire currency market is in the hands of the European Central Bank. The main result of the meeting of the board of the European regulator will most likely result in a prolonged, strengthening of the US dollar. There is practically no doubt that the parameters of monetary policy will remain unchanged. European inflation has started to rapidly increase and to solve this problem, it is necessary to both reduce the quantitative easing program and raise interest rates. Such an action plan is written in the program documents of the European Central Bank. It can be recalled that the Federal Reserve System did exactly that in a similar situation. However, the European regulator is behaving extremely hesitantly, which causes concern. The fact is that the situation in the economy may worsen even more, and the regulator will have no choice but to really quickly start tightening monetary policy without any warning.

And if investors are unprepared for such a reversal, they will suffer huge losses. It is for this very reason that the Federal Reserve System has been preparing the market for a gradual curtailment of the quantitative easing program for several months. The increase in interest rates was announced even earlier. However, the European Central Bank continues to behave as if nothing is happening. The reason for this behavior lies in the regulator's concerns about the pace of economic growth, as well as the still-high unemployment rate. Indeed, the overall macroeconomic situation in Europe is noticeably worse than in the United States, and a tightening of monetary policy in this situation could undermine the economic recovery. But the problem is that the situation may go too far, and it will be too late to take any measures. Thus, it is not surprising that investors prefer the US dollar.

Refinancing rate (Europe):

Exchange Rates 09.09.2021 analysis

The price rebound from the resistance area of 1.1880/1.1905 returned the quote to the level of 1.1800, where a slight stagnation occurred. The market may be active today due to the expected ECB meeting, where speculation is not ruled out. The price being kept below the level of 1.1790 will increase the chances to further weaken the euro towards 1.1700.

Exchange Rates 09.09.2021 analysis

The GBP/USD pair ended the correctional cycle in the area of the resistance level of 1.3880, where there was a change of trading interests. At the moment, there is a slight stop in the area of the 1.3750 mark. If the price is kept below the level of 1.3730, a subsequent decline towards the range of 1.3680-1.3600 is possible.

Exchange Rates 09.09.2021 analysis

*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

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