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FX.co ★ Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

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Forex Analysis:::2020-12-22T09:40:59

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

GBP/USD: Previous day's review

The pound managed to show activity of more than 300 points yesterday, which is considered a rare phenomenon in the market.

Such high activity was due to the information flow, as significant statistics were not published in the UK, just like in the United States. In particular, speculators were initially worried about the disagreements between the parties regarding the Brexit trade negotiations, where there were no results over the weekend.

The pound reacted with a sharp decline by more than 300 points. During the US trading session, alternative information appeared, which said that the UK was ready to make concessions on the key issue of the trade deal. This was a positive signal for the British currency, and as a result of which, it was possible to observe the process of rate recovery.

What happened on the trading chart?

The pound sterling started the trading week with a price gap, just due to the negative news on Brexit's trade negotiations. This was followed by an inertial decline towards the level of 1.3188, where there was a stop. But due to the positive information flow on Brexit, the quote rose to the level of 1.3495, which ended the trading day.

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

EUR/USD: Previous day's review

The Euro showed similar dynamics yesterday. As a result, the quote initially sharply declined, and then recovered to its previous levels.

The speculative hype around the trade negotiations between England and Brussels (Brexit) was the main driver for the high volatility.

Significant statistics were not published in Europe and the United States.

What happened on the trading chart?

The trading week began with a downward price gap of 30 points, where an inertial outgoing move was set in the direction of 1.2130.

The coordinate 1.2130 coincides with the deceleration area of December 16, thus traders considered the point of possible pivot.

The reversal move of the quote returned the euro to Friday levels, which can be seen in the chart below.

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

Trading recommendation for GBP/USD on December 22

The final data on the UK GDP for the third quarter was published today, where the pace of economic decline slowed down from -21.5% to -8.6%, against the forecasted slowdown to -9.6%, which is quite good.

The market did not react to the UK data.

In the afternoon, the final indicator of US GDP for the third quarter will be published, where the pace of economic decline is expected to slow down from -9.0% to -2.9%. The result of the expectation coincides with the preliminary estimate, which means that if the forecast also coincides, then there will be no market reaction.

The main impulse for speculative activity is still the information flow associated with the Brexit trade negotiations.

  • Positive news around Brexit leads to the pound's strengthening.
  • Negative news around Brexit leads to the pound's weakening.

The main tactic is following the information flow about the negotiation process, which has proven itself from the best side for a long time.

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

Trading recommendation for EUR/USD on December 22

US data is the only one to be published today for the economic calendar, which may not affect the dynamics of quotes.

USA 13:30 Universal time - GDP Q3

In terms of the technical analysis, it is noteworthy that there was another convergence with the local high (1.2272) of the medium-term upward trend, considering that the price returned to Friday levels.

It can be assumed that the quote will temporarily be tied to an amplitude of 1.2180/1.2275, where the best trading tactic will be the method of breaking through one or another amplitude border.

- Buying a currency pair at a price above the level of 1.2280, with the prospect of moving to 1.2250 is recommended.

- Selling a currency pair at a price below the level of 1.2175, with the prospect of moving to 1.2130 is recommended.

Trading recommendations for starters on GBP/USD and EUR/USD for December 22, 2020

Analyst InstaForex
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