Hot forecast for EUR/USD on February 17, 2021

The pound immediately changed its trend as soon as American traders came back this week. During the opening of the US session, there was a decline instead of growth. At the same time, there was nothing to see from the macroeconomic calendar. The regular actions of the politicians were also not pleasing. Recently, such a similar background was accompanied exclusively by the pound's increase, however, things are slightly different now. It seems that investors think that the British currency already made sufficient growth, and it was time to fix profits. In any case, the very reason for the pound's recent movement is purely speculative, which explains its decline yesterday. However, the scale of intraday movement remains relatively modest.

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Since the pound has begun to show some desire for a correction, today's data on inflation may be very beneficial. After all, UK inflation is expected to slow down from 0.6% to 0.4%, which is an exceptionally negative factor from the viewpoint of investors. Anyhow, the decline in inflation increases the risks of Bank of England's further easing of the monetary policy. And in general, the pound is very overbought, so a reason for a full correction is necessary.

Inflation (UK):

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The market will likely ignore the important macroeconomic data published in the US. The whole point is that the data is expected to be multi-directional. On the one hand, the growth rate of retail sales may slow down from 2.9% to 2.8%. Also, in view of relative stability in consumer prices, the decline in consumer activity is not the best factor. However, the rate of decline in industrial production is expected to slow down from -3.6% to -2.7%. This is only possible if the industry is one of the leading indicators for retail sales. If so, consumer activity will continue to rise in the near future. In other words, the macroeconomic data simply overlaps with each other. So, investors will have nothing to grab on to.

Retail Sales (United States):

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After reupdating the local high, the GBP/USD pair reached the area of the psychological level of 1.4000 (1.3950/1.4000/1.4050), where the volume of long positions were lowered, resulting in a pullback.

The dynamics in the market is not too high, and volatility is below the daily average.

Based on the quote's current location, the low of the pullback is the 1.3861 level, where traders approached during the Asian session.

Considering the trading chart in general terms, the daily period, a rapid upward trend is visible. The quote will develop at the peak of this trend.

We can assume that a correction in the market will occur, namely in the direction of the primary level of 1.3750, due to the pound's overboughtness and the strong resistance level of 1.4000.

From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments on the hourly and daily periods signal a buy, due to the price movement at the high of the trend. In turn, minute periods signal a sell due to the pullback process from the local high.

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

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