The uncertainty in the further movement overwhelmed the market last Friday. As a result, the quotes of the two main currency pairs moved sideways.

The United Kingdom published its retail sales data, where growth was recorded from 2.4% to 2.9%. On the one hand, it may seem that this is a positive news, but it was not. This is because their growth forecast for sales was up to 4.0%. Due to the mismatch of expectations, the pound weakened.

The second important statistical event in the market was the publication of preliminary data on the business activity index in Europe, UK and US.

Europe reported better-than-expected data on the index. However, its contribution to the euro was only limited, since the index is still declining in relation to the previous period.

• Services PMI (Jan): 46.4% ---> 45.0%, against the forecast of 44.5%
• Manufacturing PMI (Jan): 55.2% ---> 54.7%, against the forecast of 54.5%
• Composite PMI: 49.1% ---> 47.5%

The UK, where retail sales were negative, upset investors in terms of PMI. The reason lies in the recorded rapid decline.

• Services PMI (Jan): 49.4% ---> 38.8%, against the forecast of 49.9%
• Manufacturing PMI (Jan): 57.5 ---> 52.9, against the forecast of 57.3%
• Composite PMI: 50.4% ---> 40.6%

In turn, similar statistics in the US was recorded before Friday closed. The index started to rise, instead of the expected decline. However, confused investors remain in a neutral position.

• Services PMI (Jan): 54.8% ---> 57.5%, against the forecast of 53.6%
• Manufacturing PMI (Jan): 57.1% ---> 59.1%, against the forecast of 56.5%
• Composite PMI: 55.3% ---> 58.0%

What happened on the trading chart?

The EUR/USD pair continued to adhere to the sideways course, where the coordinates 1.2150 and 1.2190 became the variable limits of the amplitude. This is despite the flow of statistical data. There were also low dynamics, which signaled the accumulation process of trading forces in the market.

The GBP/USD pair showed great market activity. But the main blow fell on short positions (sell positions), which led to the pound's local weakening.

Trading recommendations on EUR/USD and GBP/USD for January 25, 2021

Significant statistics in Europe, the United Kingdom and the United States are not expected today. In this case, the market will continue to follow the technical analysis.

If we analyze the current trading chart of EUR/USD, it can be seen that the limits of the amplitude of 1.2150/1.2190 are still relevant in the market, where an acceleration may occur due to prolonged stagnation. This will lead to a breakdown of one or another limit of the range.

Trading tactics are based on the method of breaking a particular limit:

- Buying a pair at a price above the level of 1.2190, with a prospect of moving to 1.2220-1.2270, is recommended.

- Selling a pair at a price below the level of 1.2140, with a prospect of moving to 1.2130-1.2100, is recommended.

As for the current trading chart of the GBP/USD, we can see that the quote returned to the high of the mid-term trend again, where it slowed down the upward movement. If the quote holds below the level of 1.3700, another pullback in the direction of 1.3650 is not excluded.

An upward movement will be considered if the price holds above the level of 1.3750 in the daily time frame.