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Here's the details of the economic calendar for May 19:
Britain published its inflation data during the last trading day, where consumer prices are showing growth from 0.7% to 1.5%, which is better than the forecast of 1.4%.
The pound hardly reacted to the inflation data, since investors probably considered the current growth to be a concern for possible actions by the Bank of England, if we see an even greater rise in inflation later.
The data on inflation in the eurozone coincided with the preliminary estimate, reflecting its growth from 1.3% to 1.6%, which was not surprising for the market.
During the US trading session, the minutes of the previous FOMC meeting was published, where the text says that the regulator sees no reason to change the parameters of monetary policy, and the rise in consumer prices (inflation) is temporary.
The Fed's neutral rhetoric supported the US dollar again, where it almost immediately strengthened.
Analysis of trading charts from May 19:
After a series of upward impulses, the EUR/USD pair was able to make a local pullback, where the resistance level of the coordinates is 1.2245, and the price area of 1.2165/1.2180 serves as a variable support.
Trading recommendations from May 19 considered subsequent buy positions, but only if the price is kept above the level of 1.2250, which never happened in the market.
In turn, the British currency encountered an important price area of 1.4180/1.4224 a day earlier, which reflects the local high of the mid-term trend. Relative to these coordinates, there was a correction move towards the variable pivot point of 1.4100.
Trading recommendations from May 19 considered two possible scenarios of price development, where buy positions were not opened due to non-compliance with the conditions, while sell positions were active, which brought income of 60 points, which is about $ 60 with a transaction volume of 1 InstaLot.
Trading recommendation for EUR/USD and GBP/USD on May 20, 2021
Today, the Eurozone's volume of production in the construction sector for March will be published, where the rate of decline is expected to accelerate from -5.8% to -7.9%.
This indicator is prepared by the statistical office of the European Union, and it reflects the volume of production in the public and private construction sector, which directly indicates the flow of investments attracted in this area.
An increase in this indicator may strengthen the Euro currency, while a decrease may weaken it.
During the US trading session, America's weekly data on claims for unemployment benefits will be released. Its volume is expected to slightly decline.
Volume of initial applications for benefits may fall from 473 thousand to 450 thousand.
Volume of repeated applications for benefits may fall from 3 655 thousand to 3 640 thousand.
Claims reflect the number of citizens currently unemployed and receiving unemployment benefits. This indicator is considered the state of the labor market, where the growth of the indicator negatively affects the level of consumption and the economy.
To simply put it, an increase in the number of applications leads to a weakening of the national currency, while a decrease leads to strengthening.
Looking at the EUR/USD trading chart, it can be seen that the area of 1.2165/1.2180 continues to act as a support, which leads to the continuation of the upward trend.
The price holding above the level of 1.2200 increases the chances of buyers to break through the resistance level of 1.2145.
The price holding below the level of 1.2160 increases the chances of sellers to further decline.
As for the GBP/USD trading chart, it shows that the pivot point at 1.4100 continues to restrain sellers, which leads to stagnation and a pullback relative to this coordinate.
Subsequent actions in the market will occur depending on how traders behave relative to the level of 1.4100, so, a rebound from it, followed by a price hold above the level of 1.4150, may lead to another attempt to break through the resistance area of 1.4180/1.4224. But if the price holds below the level of 1.4090, then it may open the way towards 1.4000.
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