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Intraday Strategies for Beginner Traders on September 11


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Although the US dollar did lose ground against risk assets, it managed to avoid a larger sell-off. This suggests traders have already shifted their attention to waiting for new, and much more important, inflation data than what was released yesterday.

A sharp decline in US producer prices in August by 0.1% led to a drop in the dollar and strengthening of the euro, British pound, and other risk assets. This unexpected turn made traders reconsider their forecasts for the Federal Reserve's future monetary policy, and now the Fed is widely expected to resume cutting interest rates soon.

Today, in the first half of the day, the European Central Bank will publish its decision on the main interest rate and the monetary policy statement. A bit later, ECB President Christine Lagarde will hold a press conference. Rates are expected to remain unchanged. However, markets will watch Lagarde's language and details from the policy statement very closely in search of clues about future central bank moves. In particular, traders are keen to learn how the ECB assesses the current inflation situation in the eurozone and what its outlook on further economic growth is. Special attention will be paid to the ECB's inflation forecasts for the coming quarters and next year. If the central bank raises its inflation expectations, this may signal the complete end of the rate-cutting cycle that started in the middle of last year, helping the euro rise.

If the data matches economists' expectations, it's better to operate with a Mean Reversion strategy. If the data is much higher or lower than economists expect, it's best to use a Momentum strategy.

Momentum Strategy (Breakout):

EUR/USD

Buying on a breakout of 1.1728 could lead to euro growth toward 1.1760 and 1.1813

Selling on a breakout of 1.1695 could lead to a decline toward 1.1668 and 1.1630

GBP/USD

Buying on a breakout of 1.3553 may lead to the pound growing to the area of 1.3587 and 1.3615

Selling on a breakout of 1.3520 may lead to the pound falling to the area of 1.3484 and 1.3451

USD/JPY

Buying on a breakout of 147.50 could target 147.84 and 148.13

Selling on a breakout of 147.25 could lead to declines toward 146.90 and 146.60

Mean Reversion Strategy (Pullbacks):

analytics68c25f43971c4.jpg

EUR/USD

Look to sell after a failed breakout above 1.1708 and a return below that level

Look to buy after a failed breakout below 1.1690 and a return above that level

analytics68c25f49c0fad.jpg

GBP/USD

Look to sell after a failed breakout above 1.3536 and a pullback under that level

Look to buy after a failed breakout below 1.3514 and a return above that level

analytics68c25f5047536.jpg

AUD/USD

Look to sell after a failed breakout above 0.6626 and a pullback below that level

Look to buy after a failed breakout below 0.6607 and a return above that level

analytics68c25f57d148c.jpg

USD/CAD

Look to sell after a failed breakout above 1.3878 and a return below that level

Look to buy after a failed breakout below 1.3859 and a return above that level

The material has been provided by InstaForex Company - www.instaforex.com
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