[KostiaFM]

Trading plan for starters of EUR/USD and GBP/USD on August 31, 2021

August 31 economic calendar:

Today, the UK lending market data will be published at 8:30 Universal time, where not everything is so bad according to forecasts. The main event today is considered to be the publication of preliminary inflation estimates in Europe, which could grow from 2.2% to 2.7%. Such an intense rise in consumer prices scares investors since this situation requires immediate action from the European Central Bank, which is still doing nothing. At the same time, the regulator does not even give hints about a change in the course of monetary policy, which puts even more pressure on the market due to complete uncertainty.

In such a situation, speculators appear, where the growth of inflation can be won back by the market both by a local decrease and by growth in the value of the euro. This does not exclude local surges in the market.

From the point of view of fundamental analysis, inflation growth is a positive signal for the national currency, but when consumer prices rise faster than forecast, this is not considered the best signal.

Trading plan for EUR/USD on August 31:

The ascending inertial move has already led to the fact that the euro is overbought in the market.

In this situation, two possible scenarios can be considered:

The first one comes from the downward cycle from the beginning of June, where the current correction is already at the limit of possibilities. This can lead to the early completion of growth and the resumption of the downward cycle. This forecast will be confirmed if the price is held below 1.1800, which will open the way towards 1.1760-1.1700.

The second scenario considers an inertial move, where speculators are not stopped by an overbought signal. This leads to a movement towards the level of 1.1900.

Trading plan for GBP/USD on August 31:

The resistance level of 1.3800 is still putting pressure on buyers, which may lead to a reduction in the volume of long positions. If the price rebounds from the resistance level, a movement may occur towards the level of 1.3735.

An alternative scenario of the market development will arise if the price is kept above the level of 1.3830. This could jeopardize the downside cycle from 1.4000.