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MT5.com - Trading strategy for EUR/USD and GBP/USD on September 11th. Will traders start getting rid of the euro in advance?

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Forex Analysis:::2019-09-11

Trading strategy for EUR/USD and GBP/USD on September 11th. Will traders start getting rid of the euro in advance?

EUR/USD – 4H.

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On September 10, the EUR/USD pair continues to trade along with the correction level of 127.2% (1.1029) on the 4 - hour chart. After the quotes of the pound-dollar pair rebound from this Fibo level, traders can still count on growth in the direction of the correctional level of 100.0% (1.1106). However, since the information background for the pair is now completely absent, it is difficult for traders to find reasons for new purchases and promote the pair to the target level. Yesterday, there was no news related to the euro or the US dollar. Thus, traders continue to reflect on what Mario Draghi will announce tomorrow after the ECB meeting, what will be the changes in the monetary policy of the European Union, as well as what forecasts the chairman of the regulator will give. According to the general opinion of traders, to expect any tightening from Mario Draghi is too optimistic. No prerequisites for this. But there are plenty of prerequisites for easing monetary policy. Thus, the question is how much the ECB will soften policy after tomorrow's meeting. Unfortunately for the euro, any easing of the ECB will cause an increase in demand for the US dollar in the EUR/USD pair. Thus, the fall for the European currency in the last two days of this week is highly probable. One can only hope that inflation in America will slow down, which will slightly smooth out the effect of the ECB's rate cuts and other actions aimed at stimulating the economy.

What to expect from the euro/dollar currency pair?

On September 11, I do not expect any sharp changes in the rate and high activity of traders. The information background will be zero again today. Thus, we can only wait for the ECB meeting tomorrow and look at its results. Today, the consolidation of quotations under the Fibo level of 127.2% will mean that traders expect a negative from the ECB and Mario Draghi and begin to sell the euro in advance. This will allow us to count on the fall of the euro/dollar pair in the direction of the correction level of 161.8% (1.0918).

The Fibo grid is based on the extremes of May 23, 2019, and June 25, 2019.

Forecast for EUR/USD and trading recommendations:

I recommend selling the pair with the target of 1.0918 if the consolidation is made below the level of 1.1024. A stop-loss order above the level of 1.1029.

You can buy the pair now, as the rebound from the levels of 1.1024 – 1.1029 with the target of 1.1106 was made. A stop-loss order below the level of 1.1024. Buying a pair, given the information background, is not a priority.

GBP/USD – 4H.

analytics5d78b60ee3305.png

While the UK Parliament rests, Boris Johnson continues to feed the public "breakfast", promising to sign a deal with the European Union. The British Prime Minister says that it is still possible to reach an agreement, however, he does not say what are the possible options and how he is going to reach a consensus on the issue of the Northern Irish border? According to many economists, this is impossible because the parties are too far apart in the negotiation process. Moreover, there is not a single real option that could be "implemented tomorrow".The European Union has already stated that London did not make any real proposals to Brussels. Jeremy Corbyn said at a recent parliamentary meeting that there were no negotiations at all with the European Union, and the "Boris Johnson deal" is something ephemeral and fictitious. In this situation, it is difficult to believe Johnson, given his fierce desire to leave the European Union quickly and no matter how. Most likely, the Prime Minister wants to take advantage of the vacation of deputies, which he himself arranged, and create the appearance of activity in the issue of reaching an agreement with the European Union. However, nothing will prevent him from informing the EU leaders about the reluctance to postpone Brexit in an informal letter or, for example, in a telephone conversation.

The pound continues to trade above the level of 1.2308, which allows us to expect further growth in the direction of the correction level of 100.0% (1.2437). The bearish divergence in the CCI and MACD indicators is confusing. Nevertheless, a stop-loss order below the level of 1.2308 will protect against possible losses. Wages in the UK, according to yesterday's reports, rose by 4.0%, and unemployment fell to 3.8%. This is good news for the pound.

What to expect from the pound/dollar currency pair?

The pound/dollar pair has consolidated above the level of 1.2308, however, whether the pair will continue to grow is still a question. The bearish divergence of the CCI indicator has doubled the divergence of the MACD indicator, and both divergences remain valid. The actions of Boris Johnson, who is not going to give up after defeats in Parliament, can once again return traders to the idea of the expediency of selling the pound. Thus, I recommend not to lose sight of any news of a political nature from the UK. The closure of the rate pairs under the level of 1.2308 work in favor of the US dollar and allow you to expect to resume falling towards the correctional level of 127.2% (1.2180).

The Fibo grid is based on the extremes of January 3, 2019, and March 13, 2019.

Forecast for GBP/USD and trading recommendations:

I recommend maintaining the pair's already open purchases with the target of 1.2437 and stop at 1.2308, but I do not recommend opening new purchases due to two bearish divergences.

I recommend selling a pair with the target of 1.2180 if the closing is performed under the level of 1.2308, with the stop-loss order above the level of 1.2308.

photo
Samir Klishi
Analyst InstaForex
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