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12.10.202210:50 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD for beginner traders on October 12, 2022

Overview of October 11th macro events

Mixed data on the UK labor market somewhat spooked investors. Unemployment fell to 3.5% from 3.6%, while employment dropped by 109K, missing market forecasts of a 12K rise. Investors' fear comes from the fact that employment results were published for July and the unemployment statistics were released for August. In light of the latest figures, unemployment data for the next month may be downwardly revised.

Financial topics discussed in the media

Everything interesting revolves around the British pound at the moment. Today, the sterling gained 1%, or about 100 pips, right ahead of the London open, as the Bank of England sent mixed signals on its emergency bond-buying program. A day earlier, BoE Governor Andrew Bailey announce the UK regulator would end its bond purchases on Friday, as planned earlier. On October 12th, however, speculation grew that the Bank of England signaled several banks that it could extend its bond-buying program to protect UK pension funds.

Analysis of trading charts for October 11th

Despite an increase in speculative activity the day before, EUR/USD is still hovering around 0.9700. This indicates a flat market with the possibility of new speculative impulses.

GBP/USD broke through the support level of 1.1000 when the market saw a rise in speculative activity. Eventually, the downtrend extended to the area of 1.1410/1.1525 resistance.

Exchange Rates 12.10.2022 analysis

Macro events on October 12

During the European session, the United Kingdom delivered an industrial production report, which logged a monthly 1.6% decrease in the reading in August, missing economists' expectations of 0%. On an annual basis, industrial production came in at -6,7% in August, below market forecasts of 0.8%.

The reaction of the pound to the disappointing results is yet to come.

Similar data will be released in the eurozone. Industrial production in the region is expected to show 0.6% growth from -2.4%, which is seen as a positive factor for the economy and the driving force for the euro.

US producer prices are scheduled for release during the American session. The PPI is estimated to slow to 8.4% versus 8.7%, signaling a further decrease in inflation. In this light, the greenback may feel additional pressure as there could be more reasons for a reduction in the pace of monetary tightening.

Trading plan for EUR/USD on October 12th

In case of consolidation below 0.9650 on the H4 chart, the price would hit a new low.

Until then, traders will keep track of the price behavior around the 0.9700 mark, seeing the sideways movement as an accumulation phase.

Exchange Rates 12.10.2022 analysis

Trading plan for GBP/USD on October 12th

Speculation goes on in the market, and morning price swings that contributed to a 100-pip rise in the pound confirm that. Based on technical analysis, consolidation below 1.1000 may lead to another fall in price.

Exchange Rates 12.10.2022 analysis

Indicators on charts

A candlestick chart shows white and black bars with lines at the top and bottom. When analyzed in detail, each candlestick is different depending on a time frame: the opening and closing price as well as the maximum and minimum price.

Horizontal levels are levels of support and resistance that help traders determine when a trend is likely to change.

Circles and rectangles are highlighted examples where past reversals occurred. Such highlighting indicates horizontal lines that may exert some pressure on quotes in the future.

Up/down arrows show possible future price movements.

*A análise de mercado aqui postada destina-se a aumentar o seu conhecimento, mas não dar instruções para fazer uma negociação.

Gven Podolsky,
Analytical expert of InstaSpot
© 2007-2024
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