The previous trading day is an excellent example of how speculators behave amid a toxic information flow. This refers to the impeachment of the incumbent US president. Congress intends to impeach Donald Trump at all costs, bringing the greenback under pressure and leading to its sell-off in financial markets.
What does the trading chart show?
During the corrective move from the high of the medium-term uptrend of 1.2349, the EUR/USD pair reached the support level of 1.2130 and formed a 24-hour sideways range within the border of 1.2130 - 1.2175.
In regards to the sideways range, it was the right decision to wait for a breakout at one or another border of the range.
As for those who adhered to the recommendation from January 12, there was an opportunity to earn around 30 pips, which is $30, with a trade volume of 1 INSTALOT.
Yesterday, the GBP/USD pair was moving in an uptrend, which led to a full recovery in regards to the earlier correctional move from 1.3700 to 1.3450 during January 4-11.
Given the price changes, the medium-term upward trend may well resume.
Trading recommendations on EUR/USD and GBP/USD for January 13, 2021
Industrial production for November from the euro area is set to be released today. Production is expected to grow to -3.2% from -3.8%.
The inflation report will be delivered in the United States. Infation is expected to accelerate to 1.3% from 1.2%, giving a boost to the US dollar.
Based on the available statistics, it can be assumed that the greenback will receive support during the American session. However, if some news about the impeachment of Trump comes in, it may negatively affect the US dollar.
According to the trading chart on EUR/USD, the guote moved slowly after a rebound from 1.2130. The price recovery at this level is around 40% in regards to the earlier corrective move.
It can be assumed that speculators are focused on a recovery similar to the one on GBP/USD. Nevertheless, the downward movement may well resume if the price fails to reach 1.2240, that is, to recover by 50%.
As for the trading chart on GBP/USD, the price is approaching the local high of the mid-term uptrend of 1.3690/1.3705. This is the level where market participants feel pressure. Consequently, it leads to a reduction in the volume of long positions.
In case the price fails to go above the 1.3690-1.3705 area, the price may again rebound to 1.3600-1.3550.
Alternatively, if the price consolidates above 1.3710 on the four-hour chart, the mid-term upward trend will resume.