Here are the details of the economic calendar for May 31:
Inflation data in Italy and Germany were published yesterday, where they reflected higher-than-expected growth. However, the market did not react due to the fact that we only have data for individual countries of the Euro area.
It is worth noting that the United States and the United Kingdom were not around during the previous day due to national holidays, but this did not stop speculators.
Analysis of trading charts from May 31:
The EUR/USD pair was able to break out of the price stagnation of 1.2180/1.2205 during the last trading day, where the upper limit was broken, and the quote headed towards the resistance area of 1.2230/1.2245.
The trading recommendation on May 31 considered the strategy of breaking through one or another border of the formed range of 1.2180/1.2205. As a result of this, buy positions were opened, which brought us profit.
The GBP/USD pair still follows in the sideways channel 1.4100/1.4240, where there is a high concentration of trading forces within the upper border.
The trading recommendation of May 31 considered the method of operation based on the rebound or breakdown strategy.
Trading recommendation for EUR/USD and GBP/USD on June 1, 2021
Today, Europe's May data on business activity in the manufacturing sector (Markit) has already been published, where the index rose from 62.8 points to 63.1 points.
The index is prepared by the agency Markit Economics, which monitors the activity of purchasing managers in the manufacturing sector and reflects the changing business conditions in the industry. The growth of the index leads to a strengthening of the economy and an increase in the value of the national currency.
However, the Euro currency ignored the growth of the index. The fundamental analysis did not coincide.
After Europe, Britain reported with a similar index, but in its own country only, where the indicator declined in May from 66.1 points to 65.6 points instead of an increase.
In this case, we have a coincidence of the fundamental analysis and the market reaction. The pound's exchange rate has declined.
At 9:00 Universal time, European preliminary inflation data will be published, where consumer prices are expected to increase from 1.6% to 1.9%.
From the point of view of fundamental analysis, an increase in consumer prices leads to the strengthening of the national currency, but if a sharp rise in inflation occurs, we can get a contradictory picture.
The American statistics will close the trading day by publishing its data on the ISM manufacturing PMI for May. The index is expected to remain unchanged at 60.7 points.
Looking at the EUR/USD trading chart, it shows that the resistance area of 1.2230/1.2245 is still putting pressure on buyers, which negatively affects the volume of long positions. A further pullback towards the previously broken stagnation 1.2180/1.2205 cannot be ruled out until there is a confirmation of price holding above the level of 1.2250 in the H4 interval.
As for the trading chart of the GBP/USD, it can be seen that an attempt was made during the Asian trading session to break through the upper border of the side channel, but keeping the price above the level of 1.4240 in the H4 time frame was not confirmed in the market.
The trading tactics relative to the price rebound from the borders of the side channel is still relevant among traders, but if one is focused on the breakdown strategy, it is advised to take an adjustment to the upper limit of about 10-15 points.
