Here are the details of the economic calendar from June 24:
The Bank of England's scheduled meeting was held during the previous day, wherein the regulator kept the base interest rate at 0.1% per annum, and also left the asset repurchase program unchanged at 895 billion pounds, including the repurchase of government bonds in the amount of 875 billion pounds.
To put it simply, the BoE took a dovish position again, doing nothing. The rising inflation, which reached 2.1% in May, was regarded by the regulator as a temporary factor, with possible further growth to 3%.
The Bank of England believes that the inflation rate will normalize in the future, and so, it has no plan to raise the interest rate.
The lack of any action on the part of the regulator led to the sale of the pound sterling.
In terms of statistical data, there was a publication of weekly figures on applications for unemployment benefits in the US, where they recorded a decline in the volume.
- The volume of initial applications for benefits fell from 418 thousand to 411 thousand.
- The volume of repeated applications for benefits fell from 3,534 thousand to 3,390 thousand.
Applications reflect the number of currently unemployed citizens and those receiving unemployment benefits. This indicator is considered to be the state of the labor market, where the growth of the indicator negatively affects the level of consumption and economic growth. The reduction of applications for benefits has a positive effect on the labor market.
Everything would be fine if it were not for the orders for American durable goods, which were published along with the applications for benefits. Here, orders came out worse than expected. The May growth was 2.3%, against the expected 2.7%.
The divergence of expectations led to a stagnation in the US dollar instead of further growth.
Analysis of trading charts from June 24:
The EUR/USD pair continued to fluctuate within the borders of 1.1915/1.1955 as if signaling the accumulation process in the upcoming acceleration.
In simple terms, speculative interest arises when the market stands in one place, ignoring economic and technical factors. The focus is on local acceleration relative to the current stagnation.
The trading recommendation on June 24 already indicated the stagnation process, but the control levels, relative to which we planned to enter the market, were not affected.
The GBP/USD pair managed to break away from the psychological level of 1.4000 yesterday, drawing descending candles on the market. A characteristic speculative activity is associated with the results of the Bank of England's planned meeting.
The trading recommendation on June 24 considered the possible acceleration due to the information flow, as well as price stagnation within the borders of the psychological level.
Trading recommendation for EUR/USD and GBP/USD on June 25, 2021
There are no very important statistical indicators for Europe, the UK, and the United States today. Therefore, traders will monitor the information flow and the movement based on technical analysis.
Looking at the EUR/USD trading chart, one can see that price stagnation is still relevant in the market, so the best trading tactic is considered to be the method of breaking out of its border using the breakdown method.
Let's concretize the trading signals:
- Positions to buy will be considered if the price is held above the level of 1.1970.
- Positions to sell will be considered if the price is held below the level of 1.1905.
As for the trading chart of the GBP/USD, it shows that sellers still take control of the market, but the strongest growth in the volume of short positions will occur if the price is kept below the level of 1.3885.
To simply put it, the prolongation of the decline to new levels of 1.3865-1.3830 is not excluded, if yesterday's local low is broken.
