Past review of EUR/USD pair
The Euro showed high activity yesterday, which resulted in a breakdown of an important resistance level.
What was published on the economic calendar?
Initially, Europe's business activity index in the manufacturing sector was published, where a decline in the index from 54.8 points to 53.8 points was recorded, against the expected decline of 53.6. This was followed by inflation, which was the most important statistical indicator yesterday, where the rate of decline slowed down by one tenth – from -0.3% to -0.2%. It can be noticed that deflation has been maintained for four consecutive months.
Nevertheless, the price of euro is still growing, although Europe's data is not the best. So what is the reason for this inconsistency?
The answer to this question is the slowdown in the economic recovery in the United States in connection with the COVID-19 pandemic.
What happened on the trading chart?
The EUR/USD pair broke through an important resistance level of 1.2000 for the first time since the beginning of September, thus resuming the medium-term upward trend. Such an event is quite rare. It was also accompanied by the euro's rapid strengthening by more than 150 points per day.
It is worth considering that the US dollar was hit by sales outburst throughout the currency market.
Past review of GBP/USD pair
Yesterday, the pound did not lag behind its European counterpart which also showed a rapid upward interest.
What was published on the economic calendar?
In terms of the economic calendar, Britain's data on house prices were published, where an increase from 5.8% to 6.5% was recorded. In addition, the final data on the business activity index in the manufacturing sector was also released, which rose from 53.7 points to 55.6 points.
The market did not react despite positive statistics.
In fact, traders of the pound, as well as for the euro, were guided by the sale of the US dollar due to the weak condition of the US economy, which led to the strengthening of the pound's price.
What happened on the trading chart?
Initially, the quote followed within the lower border of the side channel 1.3300/1.3400, but a sharp reversal occurred after the start of trading in the United States, which led the quote back to the border of 1.3400, and then to its breakdown.
Trading recommendation for EUR/USD on December 2
Considering today's economic calendar, Europe's unemployment rate data will be released today, with a forecasted further growth from 8.3% to 8.5%, which may negatively affect the value of the euro.
In the afternoon, US employment data can be expected, where there is a forecasted growth by 370-400 thousand, which is very good and indicates the recovery of the US labor market.
If the forecast for employment growth in the US coincides, we can get local support for dollar positions.
EU 10:00 Universal time - Unemployment rate
USA 13:15 Universal time - ADP report on the employment level in the private sector for November
From a technical point of view, it can be seen how the quote formed a slowdown within the values of 1.2060/1.2080, but this is probably just a local stop. If the above-mentioned forecasted statistics coincided, then the dollar positions can gain support, which will return the quote to the previously overcame level of 1.2000.
Trading recommendation for GBP/USD on December 2
With regard to the economic calendar, UK statistics are not observed today, thus we should focus our attention on the statistics from the US.
In terms of technical analysis, it can be seen how the quote slowed down the upward movement after breaking through the upper border of the side channel 1.3300/1.3400. This led to a time amplitude of 1.3400/1.3440.
We can assume that the new stagnation will distribute the trading forces, and this will lead to new price surges in the market.
- Buying a currency pair at a price above 1.3440, with the prospect of moving to 1.3480 is recommended.
- Selling a currency pair at a price below 1.3390, with the prospect of moving to 1.3350 is recommended.
