29.09.202009:36 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD for 09/29/2020

The European currencies suddenly showed growth, while the pound especially distinguished itself. But everything is quite simple. Due to all these Brexit issues and tightening of quarantine measures because of COVID-19, without bad news is already positive news. Moreover, the pound has weakened significantly since the beginning of September, and from the point of view of a common technique, a local rebound has long been suggested. But everything is somewhat more interesting with the single European currency, since theoretically, it should have slightly increased more. In fact, Christine Lagarde was reporting to the European Parliament yesterday, and there were serious concerns that the head of the European Central Bank would announce the need to introduce additional stimulating measures. However, nothing like that was said. If necessary, the ECB is ready to immediately consider the possibility of expanding the current programs to stimulate the economy, but everyone has heard this phrase more than once, so we have not heard anything new.

At the same time, she announced that the European Central Bank has developed measures to soften the supervision of the banking sector. In particular, we are talking about bank reporting. The regulator intends to reduce the list of parameters and indicators that banks must report to it. This will significantly reduce the burden on the banking sector and allow banks to reduce costs. This is also an incredibly positive factor from the point of view of the markets. However, it was ignored so far, since we are still talking about intent. Most likely, the new regulations will come into force after the next meeting of the Board of the European Central Bank.

Unlike yesterday, some macroeconomic data will be published today. However, it will only be in the UK, where a clear growth in the lending market is expected. In particular, it is expected that 69.0 thousand mortgage loans were approved in August against 66.3 thousand in July. In addition, the amount of mortgage lending could grow by 3.0 billion pounds, while the amount of consumer lending is expected to grow by 1.5 billion pounds. In general, the growth of the lending market indicates an increase in consumer activity, which will stimulate economic growth. Although in the current conditions, it is more correct to talk about the economic recovery, rather than its growth.

Number of approved mortgages (UK):

Yesterday, the EUR/USD pair was in the correction stage from the support level of 1.1600 (+/- 15 pip). A temporary change in the direction brought the quote to the level of 1.1680, where a local slowdown occurred. We can assume that the correction will gradually come forward in the range of 1.1680/1.1700, which may later lead to a recovery process towards the level of 1.1600.

The GBP/USD pair showed high activity, which resulted in a technical correction from local lows. The current price fluctuation reflects a deceleration stage and it may lead to the end of the correction course. In turn, the next round of growth will occur after the end of the range of 1.2820/1.2900.