The US dollar received local support from traders during the previous day. As a result, it strengthened against its competitors.
In terms of statistics, Europe reported on the volume of industrial production, whose rate of decline slowed down from -3.5% to -0.6%, which is significantly better than the expected -3.2%. However, there was no reaction to the positive statistics from the market, although investors are glad that the industrial production is recovering.
This was followed by the US inflation data which was published in the afternoon. It was expected to accelerate from 1.2% to 1.3%, but the result was even better – 1.4%, positively affecting the US dollar.
What happened on the trading chart?
The EUR/USD pair returned to the path of correction stage after a short growth, returning market participants to the base level of 1.2130. A support level was found in this area during the start of the week.
The total volume of the decline was just over 70 points.
The GBP/USD pair showed a calm attitude, despite the fact that there was a rapid increase a day earlier, which returned us to the area of the local high of the mid-term upward trend.
The British currency slowed down and then followed by a pullback of 80 points, albeit having a high level of overbought status.
Trading recommendations on EUR/USD and GBP/USD for January 14, 2021
The weekly data on applications for unemployment benefits is expected to be published today. Its volume is expected to decline, which may positively affect the rate of the US dollar.
Volume of initial applications is forecasted to decline by 3 thousand, while volume of repeated applications is by 222 thousand.
According to the trading chart on EUR/USD, a price fluctuation below the corrective move is seen. It is necessary for the quote to remain below the level of 1.2130 in the four-hour time frame, after the continuation of the decline.
If the price does not consolidate below the support level, a possible repetition of the previous scenario from the start of trading week may occur.
As for the trading chart on GBP/USD, it can be seen that the quote continues to move at the high of the mid-term upward trend. The high is not yet updated, which can lead to a rebound from the resistance zone of 1.3690/1.3705.
If the price is held below the level of 1.3600, a sell signal will appear which will open the way towards the values of 1.3550-1.3500.
If the price holds above the level of 1.3710 in the four-hour chart, the upward trend will continue.