Analysis of transactions in the EUR / USD pair

Euro bulls earned quite a lot of profit yesterday, since even before the Fed's decision on interest rates was released, data on the EU's economic activity was published, and it came out much better than expected. All in all, the euro climbed 40 pips up from 1.2168. Afterwards, although the Fed's decision led to a temporary decline, the bulls still continued their long positions in the short term.

Trading recommendations for December 17

The euro has a strong upward potential today. Even if the data on EU's inflation comes out worse than expected, the decline will only be very little, as many already expect a decrease in the figure amid the current economic lockdown in many European countries. But if the report turns out to be better than the forecasts, the demand for the euro may increase.

At the same time, in the afternoon, weak data on the US labor market are expected to be released, which will inevitably hit the US dollar. If this happens, EUR / USD will strengthen even more, and may even reach new highs in the market.

• Open a long position when the euro reaches a quote of 1.2223 (green line on the chart) and then take profit at the level of 1.2264. However, growth can only happen if the data on the euro area's inflation comes out better than expected. A stronger leap may also occur in the afternoon, after the publication of economic statistics from the United States.
• Open a short position when the euro reaches a quote of 1.2190 (red line on the chart) and then take profit around the level of 1.2127. A breakout of this area may lead to a serious downward correction in the EUR / USD pair.

Analysis of transactions in the GBP / USD pair

Pound bulls earned quite a lot of profit yesterday, especially since the quote moved 80 pips up from 1.3460. The rather weak data on UK's economic activity did not deter traders, as most believe that a trade deal will be signed at the last moment. But to date, there is still no progress on the negotiations.

Trading recommendations for December 17

The Bank of England will announce its monetary policy decisions today, which, if coincides with the forecasts of economists, may result in a slight increase in the British pound. But if the central bank reveals that it decided to raise the volume of its bond purchase program, the demand for the currency may drop, which will then lead in a decline in GBP / USD.

Any progress in the Brexit negotiations, meanwhile, will result in another explosion of volatility in the market.

In the afternoon, reports on the state of the US labor market will also be released, and it may add support to the British pound, since nothing good is forecasted there.

• Open a long position when the quote reaches the level of 1.3575 (green line on the chart) and then take profit around the level of 1.3676 (thicker green line on the chart). Good news on Brexit may strengthen the position of the British pound. However, traders should still be careful when setting up transactions at the current highs.
• Open a short position when the quote reaches the level of 1.3493 (red line on the chart) and then take profit around the level of 1.3366. Bad news on Brexit will resume the downward trend in the GBP/USD pair.