The market continued to accumulate trading forces yesterday, which indicated that there will be sharp price changes soon.
The economic calendar included weekly data on applications for unemployment benefits in the United States, which shows a decrease, but at the same time an increase in their number.
- Volume of initial applications declined from 812 thousand to 793 thousand, against the forecasted 757 thousand. It is worth considering that the previous data was revised in favor of growth from 779 thousand to 812 thousand.
- Volume of repeated applications declined from 4 690 thousand to 4 545 thousand, against the expected 4 490 thousand. The previous data was revised in favor of growth from 4 592 thousand to 4 690 thousand.
The market did not practically react. Apparently, the value of the US dollar is strengthening against its competitors, but the changes were so insignificant that most traders failed to notice them.
What happened on the trading chart?
The EUR/USD pair moved to the consolidation stage within the borders of 1.2112/1.2144 after breaking through the interaction area of trading forces of 1.2130/1.2150. Thus, market participants are kept in a narrow range for more than 47 hours.
This type of market movement is interpreted as a cumulative process, which ultimately leads to a sharp acceleration by the time a particular border breaks down.
The GBP/USD pair entered the pullback stage, whose scale is only 80 points, after it found variable resistance above in the form of price coordinate of 1.3865.
The pound's high level of overboughtness increases the risks of a massive correction in case that the speculative interest in the market changes.
Trading recommendations on EUR/USD and GBP/USD for February 12, 2021
Today, the UK's GDP for the fourth quarter has already been published. The rate of economic decline slowed down from -8.7% to -7.8%. In quarterly terms, growth was 1%, while 0.5% was expected.
In turn, the volume of industrial production in December amounted to + 0.2%, while expecting + 0.5%.
The data seems to be positive, but the pound remains unwavering in the pullback direction.
Analyzing the current chart of GBP/USD, it can be seen that the pullback stage led us to the level of 1.3786, which is good for developing the correction. However, there is a high level of instability of interest in short positions, which can lead to a reversal and another update of the local trend high.
Analyzing the current chart of EUR/USD, the quote is still following the range of 1.2112/1.2144, accumulating trading forces before accelerating. The trading tactics regarding the break down of a particular border in the range remains the same.
- Buying a pair is recommended if the price is kept above the level of 1.2155, with the prospect of moving to 1.2185.
- Selling a pair is recommended if the price is kept below the level of 1.2110, with the prospect of moving to 1.2090-1.2070.
