Trading recommendations for starters of EUR/USD and GBP/USD on January 26, 2021

The US dollar gained support from market participants yesterday. This resulted in its strengthening against other major currency pairs.

It is almost unlikely to highlight some noteworthy statistics from Europe, the UK and the US. There was nothing in the economic calendar, which is normal on Mondays.

In terms of secondary data, the IFO German business climate index for January was published, which reflects the assessment of the current situation in the business sector and short-term planning. So, the index declined from 92.2 to 90.1, which indicates that the situation in the business environment is not the best.

What happened on the trading chart?

The EUR/USD pair showed a downward trend after Friday's stagnation in the range of 1.2150/1.2190. As a result, the lower border of the amplitude was broken.

Yesterday's trading recommendation about moving on the breakdown of a particular border turned out to be successful, which brought us profit.

The GBP/USD pair found a resistance point again within the local high of the mid-term upward trend, where the volume of long positions (buy positions) declined, while the price rebounded in the opposite direction.

We considered a similar scenario in the trading recommendation on January 25, where holding the price below the level of 1.3700 opens the way towards 1.3650. There was an increase in the trading deposit by 50 points, equivalent to $ 50 per 1 Instalot.

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Trading recommendations on EUR/USD and GBP/USD for January 26, 2021

In terms of the economic calendar, UK's labor market data will be released today, which is not expected to be good. The unemployment rate in the country is expected to increase from 4.9% to 5.1%. December's volume of applications for unemployment benefits is also forecast to rise by 35 thousand, while employment should decline by 100 thousand.

If the statistical indicators coincide, the pound may be under pressure given its recent high value.

7:00 Universal time - Labor market

In turn, the United States in only expected to publish the data on the housing cost (composite index of the cost of housing S&P/CS Composite-20 without considering the seasonal fluctuations), where growth is predicted from 7.9% to 8.6%

14:00 Universal time - US housing prices

If we analyze the current trading chart of EUR/USD, it can be seen that the quote found a variable pivot point in the level of 1.2116, where there was a pullback, followed by a stagnation. To resume the downward interest, market participants need to stay below the level of 1.2110, which will open the way in the direction of 1.2080-1.2060 in the future.

An alternative scenario: an amplitude fluctuation in the range of 1.2130/1.2170 may occur, thus repeating the previous dynamics.

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As for the current trading chart of the GBP/USD pair, we can see that the quote has approached the area of last Friday's low of 1.3635, where a slight slowdown occured. If the price stays below the level of 1.3630, a way will open in the direction of 1.3550-1.3500, which corresponds to the pound's overbought status.

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The material has been provided by InstaForex Company - www.instaforex.com

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