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Yesterday, the economic calendar was empty. On top of that, US markets, trendsetters in the financial world, were shut on the occasion of Thanksgiving Day. For this reason, market participants shifted focus towards the information flow.
Some ECB policymakers delivered their remarks. Market participants attached importance to the words: Perhaps inflation in the EU has topped out and is about to reach its peak.
In my viewpoint, it is premature to speak about the peak, but the market clings to the hope that inflation is set to ease its rapid pace.
Overview of technical charts of November 24
EUR/USD slowed down the upward cycle after the price approached the local high of the last week. In consequence, the price retraced downward and the instrument got stuck at levels slightly above 1.0400.
GBP/USD touched the intermediate resistance at 1.2150 and got stuck at around this level, thus consolidating gains. Since then, the instrument has not developed a full-fledged retracement yet. It means that traders are still bullish about GBP/USD. For this reason, sideways trading prefaces a revision of market sentiment and rebalance of trading forces.
Today US trading floors are reopening after the public holiday. Nevertheless, drastic changes will hardly happen today. The macroeconomic calendar is empty for the EU, the UK, and the US. Another thing is that the American markets are having a shorter trading session to close at 18:00 GMT.
Trading plan for EUR/USD on November 25
Under the current market conditions, sideways trading could accumulate trading forces which in turn, trigger speculative activity. That's why the reasonable strategy will be to trade an impulse following the direction after the price escapes one of the borders of the range. We should follow the sentiment of speculators.
In this situation, short time frames still generate a signal that the pound sterling is overbought. Therefore, we should not exclude the scenario of the price entering a retracement stage. Under this scenario, we expect GBP/USD to weaken a bit towards 1.2000, the level passed earlier.
Traders will consider a further upward scenario, in case the price settles above 1.2150 on the 4-hour chart.
The candlestick chart type is white and black graphic rectangles with lines above and below. With a detailed analysis of each individual candle, you can see its characteristics relative to a particular time frame: the opening price, closing price, intraday high and low.
Horizontal levels are price coordinates, relative to which a price may stop or reverse its trajectory. In the market, these levels are called support and resistance.
Circles and rectangles are highlighted examples where the price reversed in history. This color highlighting indicates horizontal lines that may put pressure on the asset's price in the future.
The up/down arrows are landmarks of the possible price direction in the future.
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