02.06.202112:10 Forex Analysis & Reviews: Trading recommendations for starters of EUR/USD and GBP/USD on June 2, 2021

Here are the details of the economic calendar for June 1:

Several statistical data were published yesterday, which certainly influenced the quotes.

The index of business activity in the UK manufacturing sector unexpectedly came out worse than the preliminary estimate. We saw 65.6 points instead of rising to 66.1 points. The divergence of expectations led to a local sell-off of the British currency.

It is worth noting that the Manufacturing Business Index is prepared by the Royal Institute for Purchasing and Supply in cooperation with Markit Economics and assesses the business climate and conditions in the manufacturing sector.

An increase in the index leads to a strengthening of the economy and an increase in the value of the national currency, while a decrease in the index entails the opposite scenario.

As for the Eurozone, the situation with the index of business activity in the manufacturing sector was different. It slightly rose above the preliminary estimate and amounted to 63.1 points in May. Everything seems to be good, but market participants were extremely cautious about the optimistic expectations for the EU economy, ignoring the statistics.

The main news yesterday was the preliminary inflation data, where there was growth from 1.6% to 2.0%. From the point of view of fundamental analysis, an increase in consumer prices to the target levels of the European Central Bank may lead to a tightening of monetary policy, which will lead to an increase in the national currency. But in our case, inflation is growing at a much faster pace than predicted, which frightens investors.

In simple terms, the fear of high inflation, coupled with uncertainty, leads to denial and failure to perform fundamental analysis.

The final data was in the United States, which released the index of business activity in the manufacturing sector for May. The index was expected to rise from 60.7 points to 60.9 points, but the actual growth was up to the level of 61.2 points.

The US data supported the US currency.

Analysis of trading charts from June 1:

The EUR/USD pair was not able to stay above the level of 1.2250, which ultimately affected the volume of long positions (buy positions) in terms of reduction.

To simply put it, the resistance area of 1.2230/1.2245 continues to put pressure on buyers, which leads to a slowdown in the upward cycle and a rebound.

The trading recommendation on June 1 considered the scenario of a price rebound, referring to the resistance level, which may eventually lead to a decline towards the levels of 1.2180/1.2205. Based on the current day results, our sell positions are already in the positive zone.

The GBP/USD pair continues to move along the 1.4100/1.4240 amplitude pattern, where the upper border of the downward trajectory was worked out during the last trading day.

The trading recommendation on June 1 considered the scenario of a natural price rebound from the level of 1.4240, so sell positions were relevant and could bring profit.

Trading recommendation for EUR/USD and GBP/USD on June 2, 2021

Today, the UK lending market has already been published, where the number of approved mortgage loans in April rose from 82.74 thousand to 86.90 thousand. At the same time, the volume of mortgage lending in April amounted to 3.30 billion pounds.

Looking at the EUR/USD trading chart, a sharp decline of the price from the resistance area of 1.2230/1.2245 is observed, which confirmed our expectations in terms of a price rebound. If the rate of decline set by the market continues, the price may move towards the range of 1.2180-1.2160, where another slowdown is possible.

As for the trading chart of the GBP/USD, it can be seen that the cyclicity in the side channel still occurs, which leads to a price movement from the upper border to the lower one. Considering the current pace, we can see a convergence of the price with the level of 1.4100, where another rebound is not excluded.