24.11.202011:14 Forex Analysis & Reviews: Trading recommendations of EUR/USD and GBP/USD pair on 11/24/20

Past review for the EUR/USD pair

The euro showed a very high activity yesterday, which was shown in the chart as a strong decline. In other words, the euro is weakening.

The reason for such a dynamic market behavior is associated with the economic calendar. In particular, the publication of the preliminary data on the index of business activity in Europe and the United States.

Europe's manufacturing sector index plummeted from 54.8 to 53.6, while in the service sector, it declined from 46.9 to 41.3. During the time that this data was published, the market hardly reacted, so the euro remained at a high level and its price even slightly rose, although it was not the best data.

After that, similar data were published in the United States before the European session closed, where the PMI reflected growth instead of slowing down.

The index of business activity in the service sector in November rose from 56.9 to 57.7, with a forecasted decline of 55.0. On the other hand, the index of business activity in the manufacturing sector for November also rose from 53.4 to 56.7, although it was expected to slow down to 56.7.

Due to the divergence in expectations, the US dollar sharply strengthened in almost all currency pairs.

What happened on the trading chart?

The quote reached the resistance level of 1.1900, where it locally slowed down as early as 13:45 UTC+00. It was followed by a strong decline, which coincides with the publication of US statistics.

This movement returns the quote to the level of 1.1800, where a stop and a partial recovery relative to the decline occurred. The day ends with a variable gap in the range of 1.1835/1.1850.

A trader could earn approximately 90 pips, if it trades on a downward trend.

Past review for the GBP/USD pair

The pound behaved quite intensively yesterday, in terms of both upward and downward interest. Such dynamics was not seen in the market for a long time, which means that traders had a chance to earn profit.

Conditionally, we stood in one place, showing such low activity that even speculators could not take part in such insufficient price fluctuation.

What was published on the economic calendar?

All the same preliminary data on the PMI were published in the UK.

Here, the index came out in different directions. There was a strong decline from 52.3 to 45.8 in the service sector, while it was expected to remain at 52.3. In the manufacturing sector, the index rose from 53.3 to 55.2. This led to a decline in the composite index, but less than expected – from 52.1 to 47.4.

The pound was on an upward wave before the statistics were published, but after the publication, the strength of growth slowed down.

At the time of publication of the business activity index in the US, the pound sharply declined, just like the Eurocurrency.

What happened on the trading chart?

After the level of 1.3300 broke down, the quote immediately moved towards the next price coordinate 1.3400, wherein the resistance was found. The level of 1.3400 is considered to be fairly important, but after price approached it, the US statistics were released, so a sharp reversal towards 1.3300 occurred.

If we consider the movement in terms of the pound's weakening, then traders had the opportunity to earn approximately 100 pips.

Trading recommendations for EUR/USD pair on Nov 24

Looking at the economic calendar, there will be no significant statistics for Europe and the United States today. Thus, the market will follow the information flow regarding Trump and Biden, as well as technical analysis.

In terms of technical analysis, you can see that another upward movement occurred with the start of the European session, which consolidated buyers above the level of 1.1850. This may open the way towards yesterday's local high (1.1905).

An alternative scenario will be considered only if there is a slowdown and the quotes decline to the level of 1.1850 again.

Trading recommendations for GBP/USD pair on Nov 24

Statistics for the UK and the US are not expected today, and so, we will continue monitoring the information flow on the Brexit process.

From a technical viewpoint, it can be seen that the pound recovered by almost 100% relative to yesterday's decline. It is not excluded that the given rate will return the quote to the level of 1.3400. But in order to further rise, the quote needs to consolidate above the level of 1.3410 in a four-hour time frame. The base high is still the coordinates of 1.3480 from September 1.

The reduction in the volume of long positions (buy positions) in the area of 1.3390/1.3400 will be considered as an alternative scenario, which may lead to a slowdown in the growth and the formation of a correction.