Here are the details of the economic calendar for May 21:
Last Friday, the United Kingdom data published its retail trade, where growth was recorded from 7.2% to 42.4% year-on-year.
The reason for such great indicators was the effect of a low base when the growth rate of an economic indicator is explained by its extremely low starting indicator.
To simply put it, the effect of lockdowns on economic indicators.
The pound did not react in any way to the data on retail trade due to the effect of the low base, where investors are not in a rush to be optimistic.
The next important economic indicator published on May 21 was the business activity index for a number of countries, which showed the preliminary data in the service sector and the manufacturing sector.
Europe showed an increase on both indicators, but the euro hardly reacted.
- Markit's business activity in the services sector for May increased from 50.5 points to 55.1 points.
- Markit's business activity in the manufacturing sector for May declined from 62.9 points to 62.8 points.
- Markit's composite business activity index (PMI) for May rose to 56.9 from 53.8.
In turn, the UK showed significant growth in the PMI, which was immediately reflected in the pound's value in terms of local growth.
- Markit's business activity in the services sector for May rose from 60.1 points to 61.8 points.
- Markit's business activity in the manufacturing sector for May rose from 60.7 points to 66.1 points.
- Markit's composite business activity index (PMI) for May rose to 62.0 from 60.0.
The business activity index in the US, as well as in Britain, exceeded the growth forecasts, which led to the strengthening of the US dollar by the end of last week.
- Markit's business activity in the services sector for May grew from 64.7 points to 70.1 points.
- Markit's business activity in the manufacturing sector for May grew from 60.5 points to 61.5 points.
- Markit's composite business activity index (PMI) for May rose to 68.1 from 63.5.
Analysis of trading charts on May 21, 2021:
The EUR/USD pair failed to break through the resistance level in the face of the price area of 1.2245/1.2250, which eventually led to a reduction in the volume of long positions and, as a result, a decline towards the previously known support level of 1.2160.
Trading recommendations from May 21 considered buy positions, but only if the price holds above the level of 1.2250, which never happened in the market. The alternative scenario came into force in the form of a logical basis of the past associated with the price area of 1.2245-1.2250.
In turn, the British currency rebounded from the resistance area of 1.4180/1.4224 again, locally hitting it, but not breaking through it.
Trading recommendations from May 21 considered buying positions in the case of holding the price above the level of 1.4224, for an H4 time frame, which did not happen in the market.
Trading recommendation for EUR/USD and GBP/USD on May 24, 2021
Today, there are no statistics worth paying attention to. In addition to everything, countries such as Germany and France are not here today in celebration of Shavuot.
Looking at the EUR/USD trading chart, it can be seen that the closed cycle is within the borders of 1.2160/1.2150, where the quote follows more than four trading days. In this case, we should pay special attention to the specified range, since the main trading volume will come by the time a particular border breaks down.
The trading method is based on the breakdown of one or another border, working on the outgoing impulse.
As for the GBP/USD trading chart, it shows that the upward trend is still relevant among traders, but the resistance area of 1.4180/1.4224 is putting pressure on buyers, resulting in a slowdown.
A new cycle of upward movement should be expected above the level of 1.4250 since variable bumpiness is not excluded.
