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20.07.2021: EUR and GBP to slide further on upbeat US data. Outlook for EUR/USD, GBP/USD

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Apparently, the market is about to trade sideways. Even the British pound's decline has slowed down. Logically, an impressive and long-term dollar rally is likely to be followed by a local correction. However, traders are hesitant to enter the market.
Investors seem to be slightly confused about forecasts for today's US statistics on its construction industry. After all, housing starts are expected to rise by 0.8%, which indicates both an increase in industrial output and consumer activity. Both of these indicators are critical to US economic growth. Moreover, US construction activity is likely to expand further as building permits are anticipated to increase by 0.5%. Thus, according to forecasts, the US economy continues to recover. In such a situation, trading against the dollar is not the best strategy. In addition, investors are increasingly concerned about a deteriorating epidemiological situation in the world, especially during the summer holiday season. Despite this, the UK still decided to lift lockdown measures. Yesterday, the euro/dollar pair dropped to the area of 1.1765 but then returned to the level of 1.1800. According to the trading chart, it can be seen that the 1.1800* level acts as resistance, increasing the volume of short positions. In this situation, traders should focus on yesterday’s local low of 1.1764. If the price fixes below it, the European currency will most likely extend losses. Despite its local oversold status, the pound/dollar pair continued its bearish run. As a result, the quote managed to slide to the low reached in March-April 2021. The current trading chart shows price fluctuations along the level of 1.3660, followed by a slight slowdown in its downward movement. It can be clearly seen that the market is in oversold territory. Thus, the pair may enter a technical correction. However, if the price fixes below 1.3640 on the four-hour chart, it is likely to approach the area of 1.3550-1.3500.

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00:00 Intro
00:19 USA
01:06 QUOTES
01:22 EUR | USD
01:55 GBP | USD
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