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16.09.202110:00 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on September 16, 2021

Yesterday's trading began with a clear increase in the pound, although the UK's inflation data was simply terrifying. The growth rate of consumer prices surged from 2.0% to 3.2%, with a forecast of 2.9%. Such a strong increase in inflation casts doubt on the economic recovery and increases the risks of a second slide into recession. Moreover, this forces the Bank of England to take certain steps to curb the growth of consumer prices, and, given the scale of the increase in inflation, it is necessary to act urgently. The market may not be ready for such a development of events. Nevertheless, the pound was growing. But after the publication of the data, it is already much more modest. This is largely due to the fact that the pound showed a major decline a day earlier, which partly considered the upcoming inflation data. As a result, the pound was ready for an increase in consumer prices, which could only stop the rebound that had begun.

Inflation (UK):

Exchange Rates 16.09.2021 analysis

The situation is quite similar to the Euro currency. And this is despite the fact that Europe's macroeconomic statistics clearly favored growth. Here, the growth rate of industrial production slowed down from 10.1% to 7.7%. It is worth noting that they predicted a slowdown to 6.2%, but if the single European currency showed growth, it was purely symbolic.

Industrial production (Europe):

Exchange Rates 16.09.2021 analysis

It was not possible to complete the rebound, as the US industrial data also turned out to be significantly better than forecasts. It was expected that its growth rate would slow down from 6.6% to 5.0%, but in fact, it fell only to 5.9%. In other words, the process of restoring the American economy is going somewhat better than expected.

Industrial Manufacturing (United States):

Exchange Rates 16.09.2021 analysis

However, the euro and the pound will have another opportunity today not just to carry out a local correction, but even try to return to the levels at which they were before the noticeable decline that happened on Wednesday. The American industry shows good results, but the markets believe that this is a secondary indicator. Much more important is the state of consumer activity, which is the main driver of the US economy. The best indicator of its condition is retail sales, the growth rate of which should slow down from 15.8% to 13.0%. However, due to the continuing effect of a low base, the annual data are not entirely informative. Thus, it is better to focus on the monthly period. However, retail sales may decrease by 0.7% in monthly terms.

Moreover, it can be recalled that US inflation has fallen. In other words, consumer prices are falling simultaneously with consumer activity, which is an extremely unpleasant combination.

Retail Sales (United States):

Exchange Rates 16.09.2021 analysis

The price rebound from the local high on September 10 returned the quote to the support level of 1.1800, where stagnation occurred. It can be assumed that the downward interest is still relevant in the market, but in order to confirm it, the quote needs to keep below the level of 1.1790 for a four-hour period. Otherwise, another growth to the local high of 1.1850 awaits us.

Exchange Rates 16.09.2021 analysis

The GBP/USD pair continues to move between the levels of 1.3800 and 1.3880, consistently rebounding from them. In this situation, the main strategy is considered to be a method of trading on the breakdown of one level or another, which may indicate the next direction.

Exchange Rates 16.09.2021 analysis

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