27.05.202110:10 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on May 27, 2021

The euro and the pound were practically under pressure throughout the day yesterday. This is especially true for the British currency. At the same time, they created difficulties for themselves. As funny as it may sound, Brexit is the main reason. It is no secret that the trade agreement between London and Brussels is beneficial to the EU, while the UK is essentially turning into a kind of subordinate. Naturally, the United Kingdom will try to somehow correct this injustice, and the main goal here is the border dividing Ireland. More precisely, the order of movement of goods and services across the border separating the Emerald Isle. Recently, London announced that it will try again to achieve a revision of the provisions of the trade agreement concerning this unfortunate dividing line.

However, Brussels responded harshly, clarifying that there can be no question of any revision of the trade agreement's provisions. But this did not seem enough to Europe. On the other hand, France announced that it would impose strict restrictions on Britain's subjects staying on its territory from May 31. There are all sorts of quarantines, tests, and the like. We can say that it's all about the coronavirus pandemic and France's desire to protect its citizens, and it has nothing to do with the border between the Republic of Ireland and Northern Ireland. But the fact is that the UK is the absolute leader in terms of vaccination and the fight against this coronavirus at least in Europe. So, it is London that should announce such measures. In this case, we can assume that the actions of Paris are exclusively a political step. This means that political interests are predominant, which is extremely bad. When political interests become predominant in making certain decisions, it never leads to good. Therefore, investors' concerns are quite justified.

Today, politics will clearly recede into the background, since today is the only day for the whole week when at least some macroeconomic statistics are published. We are talking about US statistics, which are very important for the markets. The most talked-about is the GDP data for the first quarter, which should show that the economic decline by 2.4% was replaced by a growth of 0.4%. And although this is fine, these very data matter the least. The fact is that preliminary data are being published today. In this case, the second estimate must coincide with the first. That is, the market has long ago incorporated this result into the value of the US dollar. In addition, the data on applications for unemployment benefits will also not have a significant impact, since their total number should be reduced by only 50 thousand. Changes are extremely insignificant.

Against this background, everything looks quite average. For example, the number of initial requests should decrease by only 19 thousand, and repeated requests by only 31 thousand. However, the focus will be on data on orders for durable goods, the volume of which may grow by 0.7%. This means that American consumer activity will continue to rise. It is worth noting that consumer activity is the main driver of the growth of the US economy.

Durable Goods Orders (United States):

The EUR/USD pair encountered a resistance area in the face of the level of 1.2250 while moving along an upward trajectory in the structure of inertia from May 24. A slowdown occurred, which led to a pullback. We can assume that the current decline to the area of 1.2165/1.2180 will lead to a repetition of the natural basis of May 19 and 24.

The GBP/USD pair has a stable sideways movement all over the week, reducing the price fluctuation to the range of 1.4100/1.4135. The convergence of the price with the border of 1.4100 still leaves a chance for a rebound. Market participants will consider an alternative scenario if the price is kept below the level of 1.4090.