Yesterday's market activity was only noticed during the Asian session, as traders were not particularly active during the rest of the time.
The economic calendar included Europe's industrial production data, where the decline was predicted to slow down from -0.6% to -0.3%, however, it accelerated by -0.8%. It should be recalled that industrial production in the EU has been deteriorating for 26 months.
The market did not react to the negative statistics in Europe, which is possibly due to the decline in trading volumes in the market caused by the public holiday in the US, in celebration of President's Day.
The EUR/USD pair approached the resistance area of 1.2150 again, where a reduction in the volume of short positions occured. The existing convergence of the price with the level was no exception in the market, which resulted in a slowdown and a pullback.
Despite the pound's overbought status, its position continues to strengthen in the market, updating the high of the medium-term trend. The convergence of the price with the psychological level of 1.4000 may lower the volume of long positions.
Trading recommendations on EUR/USD and GBP/USD for February 16, 2021
Today, the second estimate of Europe's GDP for the fourth quarter will be published, where the pace of economic decline is expected to rise from -4.3% to -5.1%. In this case, the ongoing economic downturn may put pressure on the European currency.
Just like the United States, the UK is not expected to release important statistics.
If we analyze the current trading chart of the EUR/USD, a primary pullback can be seen from the resistance area of 1.2150, where the quote may decline to the range of 1.2110-1.2100. The main round of euro weakening will come after the price is kept below 1.2080, with the prospect of moving to 1.2000-1.1950.
Traders will consider an alternative scenario of the market development if the price is held above 1.2160 level in the H4 time frame. In this case, we may talk about the restoration of the quote relative to the corrective move.
As for the current trading chart of the GBP/USD, it can be seen that the quote has already approached the area of the psychological level of 1.3950/1.4000/1.4050, which negatively affects the volume of long positions. We can assume that a correction may occur in the market, given the pound's overbought status and strong resistance level.
