Daily Market Analysis by ForexMart

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EUR/USD. January 19, 2021 – The pair is awaiting Biden's inauguration

On Tuesday, the major currency pair started recovering from the 1.2050 area. The current quote EUR/USD is 1.2135.

Today the macroeconomic calendar is empty, but market participants have something to think over. For example, the results of the Reuters poll showed that the new stimulus package from the ECB is unlikely to have a positive impact on the European economy. In particular, we are talking about the already agreed PEPP package of 185 trillion euros, which was extended for another 9 months. Against the backdrop of such pessimistic opinions, the economic outlook for the eurozone looks rather bleak.

As for the United States, not everything is smooth here either. Former head of the Federal Reserve System Janet Yellen said that the US economy could find itself in a long and rather severe recession if Congress does not agree on additional support measures. Today, attention should be paid to Yellen's speech, which, as expected, Joe Biden intends to appoint the new head of the Federal Reserve System.

The inauguration of the new US President-elect Joe Biden will take place tomorrow. Market participants are waiting for this event, so the dynamics of trading today will not differ in activity.

January 19, 2021. Fundamental analysis of the oil market

The oil market, which has been growing steadily since the beginning of November last year (when the first news of successful trials of coronavirus vaccines appeared), is gradually losing its impetus. Having managed to rise from the $40 per barrel area to $57 from October to January, today oil is traded near the $55 per barrel level.

The January 2021 high at $57.5 was reached after Saudi Arabia unexpectedly announced its decision to unilaterally cut oil production in February and March (by 1 million barrels per day). Then the pandemic and its consequences on transportation and fuel demand again began to put pressure on quotations.

At the same time, some support for the prices of «black gold» is provided by the approval of Joe Biden as the new US president. Market participants expect that its measures to support the economy will raise inflation, which has increased the demand for oil from speculators and investors.

Taking into account the current fundamental background, it can be concluded that oil prices are unlikely to grow significantly in the near future. We believe that the range of fluctuations in Brent quotes will be represented by a corridor of $50-55 per barrel.

Today prices are rising slightly from the $55 level in anticipation of a report from the International Energy Agency (IEA). The experts of the organization intend to share their forecasts for the further dynamics of the market, taking into account the new lockdowns in many countries.

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EUR/USD. January 20, 2021 – Euro continues to rise above 1.2150

On Wednesday, the euro continues to rise, reaching 1.2150. Yesterday, ex-head of the Federal Reserve System and future US Treasury Secretary Janet Yellen made a speech, which market participants were looking forward to.

Yellen calmed the markets by assuring them of additional fiscal stimulus and promised not to interfere with the dynamics of the dollar. The politician also noted that in the post-crisis period, the United States needs a weak currency in competition and said that the Treasury Department will fight against attempts by other central banks to manipulate the exchange rates of national currencies.

Now, in order to reduce the rate of the single European currency, the ECB will have to somehow outplay the FRS, but the European regulator has long since exhausted the entire arsenal of stimulating instruments. The expansion of the QE program is unlikely to spur inflation, analysts say. Thus, with the strong weakening of the dollar and the ECB's inability to influence the euro rate, the EUR/USD pair has only a way up.

Today we should pay attention to the data on inflation in the eurozone. Deflation has been raging in Europe for four months now. And the final data on consumer prices should reflect their continued decline at the level of -0.3%, which will put significant pressure on the euro rate and allow the bears to return quotes to the level of 1.21.

An important event today will be the inauguration of Joe Biden and his first appearance as the new president of the United States.

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USD/CAD. January 21, 2021 – Canadian dollar strengthens to 3-year highs

The USD/CAD currency pair on Thursday dropped to the level of 1.2600. The Canadian dollar strengthened to a maximum of three years after the announcement of the results of the meeting of the Bank of Canada.

As market participants expected, the regulator kept the interest rate unchanged at 0.25%. At the same time, it was announced that the rate would be near zero until at least 2023. The program of quantitative easing also remained unchanged, the volume of which currently amounts to 4 billion Canadian dollars per week.

The Central Bank also shared its forecasts for economic growth this year. Experts expect GDP growth in 2021 to be 4.0%, slightly below the previous forecast of 4.2%, while in 2022 and 2023 the economy will grow by 4.8% and 2.5%, respectively.

However, the «loonie» is showing growth, despite these expectations, as well as weak economic statistics. In particular, Canada's core CPI fell 0.4% in December after rising 0.2% in November, while CPI declined 0.2% after rising 0.1% a month earlier.

Considering all of the above, the pressure on the Canadian dollar should have increased, but the loonie unexpectedly strengthened to highs. Analysts regard such dynamics as a temporary phenomenon, and the pair's growth may continue at any minute. An additional factor that could put pressure on the «Canadian» is one of Joe Biden's first decrees to stop the construction of the Keystone XL oil pipeline, which was actively supported by the Canadian authorities.

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GBP/USD. January 22, 2021 – Pound falls under pressure from economic publications

Yesterday the British pound fell to 1.3650, today the pair recovered to 1.3670.

Sterling looks pretty stable against the dollar, despite the local correction. The fact is that the currency finally got rid of the strong pressure from the Brexit risks and the confrontation between the politicians of the European Union and London.

At the same time, support for the currency today is also provided by successful vaccination in the UK against the background of a double lockdown, and perhaps the country's population will be able to return to their usual way of life in the second quarter.

Macroeconomic statistics are negative today for the pound: retail sales in December rose only 0.3%, worse than the forecast for growth by 1.2%. Composite PMI also fell short of the forecast: 40.6 points in January against expectations of 50.7 points. The business activity index in the manufacturing sector was 52.9 points (forecast - 57.3), and in the service sector – 38.8 points (forecast - 49.9).

Thus, at the end of the week sterling came under pressure from economic indicators. The RSI indicator is targeting the support area, which signals further currency weakening.

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Brent. January 25, 2021 – Oil recovers after falling last week

Brent oil quotes are growing on Monday, approaching $56 per barrel. The current price is $55.72.

Last week ended with a fall in prices to $54.60 per barrel. The decline was driven by data on changes in US oil reserves. According to a published report from the Energy Information Administration, crude oil inventories rose 4.4 million barrels in the reporting week, reaching 486.6 million barrels. Analysts, on the other hand, had expected a decline in inventories by 1.3 million barrels from the previous week. Oil production in the United States remained unchanged at 11 million barrels per day.

Additional pressure on prices was also exerted by the increase in the number of cases of coronavirus in China. Experts note that the deterioration of the epidemiological situation in China will inevitably affect the demand for oil.

Today's growth in quotations was due to the news about the reduction in oil production in Iraq. It became known that the country intends to cut oil production in the first two months of this year in order to compensate for the violation of the terms of the OPEC + agreement from last year.

EUR/USD. January 25, 2021 – The dollar started the week with a decline

The main currency pair is trading at 1.2145 on Monday. The macroeconomic calendar for today is practically empty, attention should be paid only to the publication of the IFO business climate index in Germany. The indicator came out worse than forecast: 90.1 points in January against 92.2 in December and the forecast of 91.8 points.

The US dollar is now showing mainly a downward trend. The fact is that Joe Biden has already officially assumed the presidency of the United States, and the markets are waiting for the imminent introduction of additional measures to stimulate the economy. Therefore, the dollar in its «safe» status is no longer popular as investors intend to buy.

This week promises to be quite interesting. First, a meeting of the Federal Reserve System and a rate decision is scheduled. Market participants are confident that the rate will remain at the current level of 0-0.25% for a long time, however, the FRS comments will be of the greatest interest, which may become more optimistic.

Secondly, interesting statistics from the United States will be presented: the January consumer confidence index from the Conference Board, the US GDP for the IV quarter of 2020, the parameters of personal income and expenses of Americans, as well as data on the trade balance.

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GBP/USD. January 26, 2021 – The pound is growing steadily after the release of strong statistics

The GBP/USD pair started the day with growth from 1.3600 to 1.3690. The sterling was supported by positive statistics on the labor market in the UK.

In particular, the average level of wages in the country in November rose by 3.6% against the previous figure of 2.8% and the forecast for growth by 2.9%. The number of applications for unemployment benefits in December fell to 7 thousand, while analysts predicted the figure at 35 thousand. Moreover, the unemployment rate rose to 5%, which was better than the forecast for growth to 5.1%. At the same time, experts note that the current unemployment rate has updated its maximum since the beginning of 2016.

In the US today, it is worth paying attention to the CB consumer confidence index. Analysts expect the indicator to rise from 88.6 to 89.0 points.

The RSI indicator is heading towards the resistance area, which signals further strengthening of the pound sterling during the day. The nearest target of the «bulls» is 1.3700, where the pair, however, will see some consolidation.

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EUR/USD. January 27, 2021 – Euro declines on negative fundamental background

The EUR/USD pair demonstrates multidirectional trading dynamics on Wednesday, fluctuating in the 1.2100-1.2180 price range. The current quote for the pair is 1.2115.

The euro was under pressure from negative news from Europe. In particular, in Italy, Prime Minister Giuseppe Conte resigned, the index of business sentiment in Germany from IFO dropped again, and Angela Merkel in Germany said that the country's governance had gotten out of control and spoke about the need for stricter restrictions.

Pressure on the European currency is also exerted by Europe's lag behind the United States in the speed of vaccination. Pfizer says it is ready to ship 200 million vaccines to the United States by the end of May (or 2 months ahead of schedule). But the supply of vaccines to Europe is being delayed due to the problems of the Belgian manufacturer AstraZeneca.

Today, the first US Federal Reserve meeting this year will take place and a press conference by Jerome Powell, who is trying to assure the markets of maintaining the monetary policy of the regulator. However, many analysts interviewed are confident that the scale of the QE program needs to be scaled back this year. So, further dynamics of the pair will depend on the results of the meeting.

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EUR/USD. January 28, 2021 – Euro continues to decline

The euro rate continues to decline on Thursday, the current quotation of the EUR/USD pair is 1.2080. Markets fear that existing vaccines will fail to cope with mutating Covid strains, endangering the prospects for global economic recovery.

Jerome Powell, whose press conference failed to clarify the topic of the Fed's further position and calm the markets, also added negative investors. Although the head of the regulator said that the Fed does not plan to cut QE and will make sure that investors know in advance about the systematic and gradual reduction in the volume of asset purchases. However, market participants did not see a negative assessment of the situation in the general tone of the speech, which provoked dollar purchases.

The euro is also declining in value after the ECB meeting on January 21. Then the regulator announced that it was ready to take action, as it was not satisfied with the high rate of the single currency. And the actions of the ECB are fully justified. According to IMF forecasts, the euro zone will be able to return to pre-crisis levels only by the end of 2022. For comparison, the Chinese economy has already outpaced 2019, and the US economy will return to the trend at the end of this year.

Thus, the pair's downside potential is quite high. During the day we expect further strengthening of the US dollar with the target of 1.2050.

January 28, 2021 – Oil market weakens on concerns about demand prospects

Oil prices began to decline on Thursday amid expectations of a drop in demand due to the continuing rise in the number of Covid-19 diseases and the current restrictive measures. The quotes were not helped either by the data on crude oil reserves in the United States published yesterday: according to the Ministry of Energy, reserves unexpectedly fell by 9.91 million barrels over the week. At the same time, gasoline stocks increased by 2.47 million barrels, while distillate stocks decreased by 815 thousand barrels. Analysts predicted an increase in oil reserves by 430 thousand barrels.

The current Brent quote is $55.18 per barrel. A myriad of concerns about the outlook for demand are putting strong pressure on prices. Moreover, the Chinese authorities are urging their citizens to stop traveling during the Lunar New Year holidays, which is the most active tourist season of the year. And this will inevitably lead to an additional decrease in demand.

Another factor in the weakening of the oil market was a sharp drop in traffic in Los Angeles over the past month due to restrictive measures in California.

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EUR/USD. February 01, 2021 – Euro declines amid weak statistics

The EUR/USD pair closed last week with a rise to the 1.2150 area. The euro was supported by the GDP data of the leading eurozone countries. In particular, France's GDP growth in December was 23%, exceeding the projected increase by 19%. Spain's GDP in the IV quarter added 0.4%, while experts had expected a decline of 1.5%. Germany's GDP also remained in positive territory at 0.1%. In Germany, in addition, the unemployment rate fell to 6%.

However, today the pair started to decline, which is also explained by the reaction of traders to the latest macro statistics. According to the Federal Bureau of Statistics Destatis, retail sales in Germany were down 9.6% in December from the previous month.

At the same time, the US continues to discuss a new package of measures to help the economy, which puts general pressure on the dollar. Market participants believe that the project will be criticized by the Republicans, who are unhappy with the huge volume and want to reduce it to $600 billion. However, the Ministry of Finance and the Federal Reserve still insist on the need for new incentives. In this case, the pair's rate can rush to new highs.

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EUR/USD. February 2, 2021 – Euro falls on weak data from Germany

The US dollar continues to trade near local highs in the 1.2050 area. Weak macroeconomic data from Germany put pressure on the European currency.

According to the European statistical agency Eurostat, unemployment in the region remained at 8.3% in December, in line with market expectations. At the same time, the volume of retail sales fell by 9.6% in December after growing by 1.1% a month earlier. Analysts had expected a 2.6% decline. On an annualized basis, sales growth was 1.5% against the forecast of 5%.

Today, the dynamics of the pair will be influenced by the report on the eurozone GDP. Analysts predict that the pace of economic decline in the region in the IV quarter should accelerate from -4.3% to -6.0%, which may provoke further sales of the single currency.

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EUR/USD. February 3, 2021 – Euro near 2-month lows

The euro continues to decline paired with the dollar, reaching 1.20. The last time the single currency traded at such levels was at the beginning of December 2020. The weak rates of vaccination in Europe and the ECB's dissatisfaction with the high rate of the European currency remain negative factors for the euro. The regulator noted that it is closely monitoring the dynamics of the exchange rate and does not exclude a decrease in the rate on deposits, if this will help to accelerate inflation.

Macroeconomic indicators of the euro area are also not encouraging. Although earlier data on GDP for the IV quarter showed a decrease in the economy by 0.7% (q / q) and by 5.1% on an annualized basis, which turned out to be better than forecasts (a decrease by 0.9% and 5.4%, respectively).

Today we should pay attention to the report of the American labor market from ADP, as well as the index of business activity in the service sector ISM. Experts do not expect strong indicators, which may provoke a weakening of the dollar. Moreover, today's statistics may influence the decision in the Congress on incentives, which, if the package of assistance measures is approved, will entail further sales of the American currency.

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EUR/USD. February 04, 2021 – Euro remains weak at 1.20

The EUR/USD pair continues to update local lows, trading below 1.20. Market participants continue to monitor forecasts for GDP growth in the eurozone and the United States, where European countries are clearly losing. Last week, worsened expectations for German GDP this year were published, and traders are now very attentive to any data from the FRG, projecting them to the entire eurozone as a whole.

Earlier Germany published the final data on the index of business activity in the service sector for January, where the indicator was 46.7 points against the previous level of 46.8. The same figure for the euro area rose to 45.4 points from the December value of 45.0.

The preliminary calculation of inflation in the euro area reflected an increase in the indicator by 0.9% (y/y), while the forecast assumed an increase of 0.6%. Core inflation in the region accelerated even more – by 1.4% y/y, while expected to rise by 0.9%.

At the same time, the US dollar was supported by yesterday's positive statistics from ADP. The January report on the number of jobs in the private sector showed an increase of 174 thousand against the forecast of 48 thousand. It should be assumed that tomorrow's report on the US labor market will also exceed the expectations of traders

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EUR/USD. February 05, 2021 – Euro keeps updating new lows

The euro continues to decline at the end of the first week of February: the current quotation of the EUR/USD pair is 1.1950. The main pressure on the European currency rate is exerted by weak economic indicators from Europe and pessimistic forecasts regarding further economic recovery due to the preservation of lockdown regimes in some eurozone countries.

At the same time, the US dollar was supported by yesterday's data on the number of applications for unemployment benefits: the figure fell to 779 thousand against the forecast of 828 thousand and the previous value of 812 thousand. Such figures are a very positive signal for the American economy.

Today it is worth paying attention to the publication of data on the employment market for January. The forecast assumes that unemployment will remain unchanged at 6.7%, and the number of jobs outside the agricultural sector will increase by 85 thousand after a decline in December by 140 thousand. Average hourly wages may rise by 0.3% m/m after the previous growth of 0.8%. Thus, the stronger this statistic is, the more confident the dollar will feel.

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GBP/USD. February 08, 2021 – Sterling holds positions in highs

Quotes of the GBP/USD pair have continued to trade in a wide range of 1.3560-1.3760 for three weeks already. The current quote for the pair is 1.3700.

The pound managed to move away from the lows last week after the Bank of England meeting. The regulator said that the nationwide lockdown, which will last for almost two months, will have no impact on the economic outlook in the future, and the UK GDP will recover by the first quarter of 2022.

Moreover, the regulator noted that there is some discomfort from an overly inflated balance sheet, and this raises expectations of a faster decline in government bond purchases. This speaks of the likely further tightening of the monetary policy of the Central Bank, which will inevitably lead to a strengthening of the British currency.

Today the macroeconomic calendar is empty, so the pair will continue to trade near the 1.3700 level.

EUR/USD. February 08, 2021 – Consolidation just above the 1.20 level

On Monday, the euro is falling moderately after the publication of economic reports from the euro area. In particular, the Sentix index of investor confidence in the eurozone economy in February fell by 0.2 points against the forecasted growth of 1.9 points. Industrial production in Germany in December remained at the level of November, while analysts had expected an increase of 0.3%.

Last Friday, it became known that the US Senate passed a bill allowing the adoption of a $1.9 trillion stimulus plan proposed by President Joe Biden without Republican support. This suggests that the final version of the stimulus bill may be agreed upon in March.

At the same time, weak statistics on the US employment market only accelerates the process of agreeing on the aid package. In January, the unemployment rate fell to 6.3% from 6.7% earlier, but this is where all the positive ends. Only 49 thousand new jobs were created outside the agricultural sector, with a forecast of an increase of 85 thousand.Average hourly wages in January grew by only 0.2% m / m against the forecast of growth by 0.3% and growth by 1.0 %.

The current quote for the EUR/USD pair is 1.2020. The macroeconomic calendar is empty for today, so the instrument will continue to move almost horizontally in the area just above 1.20.

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EUR/USD. February 09, 2021 – Euro is stable around 1.2100

The euro continues to trade in the area of ​​local highs near 1.2100. The European currency is growing, despite weak statistics from the eurozone. Sentix investor confidence index in February fell to -0.2 points against 1.3 in January. At the same time, the forecast assumed an increase to 4.1 points.

Data from Germany also turned out to be worse than forecasted: the statistics on industrial production reflected a zero change in the indicator against the forecast of growth by 0.1% m/m and the previous fact of increase by 1.5%.

So, we can say that the EUR/USD pair is growing mainly due to the general weakness of the US dollar in the Forex market. The American currency is weakening amid the process of adopting the stimulus package in the United States. Some days before, a bill was passed to approve Joe Biden's $1.9 trillion anti-crisis program without Republican support in the Senate.

Today the macroeconomic calendar is empty, so the pair will move moderately near the 1.2100 level.

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EUR/USD. February 10, 2021 – Euro consolidated above 1.2100

The EUR/USD pair continues to trade above 1.2100 and is not going to give up the pace for now. The current quote for the pair is 1.2125. There were very few macroeconomic statistics on Monday and Tuesday, it is worth noting only the data on the index of optimism in small business in the United States. The indicator fell to 95.0 points, while analysts predicted growth to 96.6.

Today, all the attention of the markets is drawn to the publication of data on inflation in the US for January. The significance of this report is quite large: it will either give the White House an excuse to speed up the process of agreeing on the aid package, or it will allow it to take the time to make important decisions.

Analysts expect the US CPI to rise 0.3% mom, after rising 0.4% in December. Core inflation in January could have increased by 0.2% MoM after increasing by 0.1% in December.

In the evening hours, you should pay attention to the speech of the head of the US Federal Reserve System Jerome Powell. It is expected that the politician will give his assessments to the published statistics on inflation and touch on some of the nuances of the regulator's monetary policy.

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EUR/USD. 11.02 | European currency continues to dominate

The euro/dollar continues to maintain potential for growth: the current quotation of the pair is 1.2125.

Inflation statistics were released yesterday: US CPI rose 0.3% mom in January, in line with forecasts after expanding 0.4% mom in December. Annual inflation is estimated at 1.4% against 1.5% earlier. The core consumer price index did not change at the beginning of the year.

The head of the US Federal Reserve System also made a speech yesterday. Jerome Powell noted that plans for a global stimulus remain unchanged. This suggests that nothing threatens interest rates for a long time. Moreover, the regulator hinted that inflation could exceed the target level of 2%, and this is quite acceptable, since the economy should try to grow on its own.

Today the macroeconomic calendar is not rich in publications. Attention should be paid only to the weekly report on the number of applications for unemployment benefits, which may support the position of the greenback.

GBP/USD. February 11, 2021 – The pair is stable above 1.38 level

On Thursday, the pound declines moderately from highs near 1.3870 to 1.3800.

The recent strengthening of the British currency was supported by the growing demand for risky assets and the general weakening of the US dollar amid expectations of a decision on fiscal stimulus. Market participants are almost certain that the program proposed by Joe Biden will get approval in Congress anyway, despite the resistance of the Republicans, who demand a reduction in the aid package.

The dollar is also under pressure after Jerome Powell's speech yesterday. The head of the Fed said that it may take years for the full recovery of the labor market, as the consequences of the pandemic turned out to be more devastating than initial forecasts. Powell also noted that the regulator does not intend to abandon the course of super-soft monetary policy.

Today the macroeconomic calendar is not rich in publications. Attention should be paid only to the data on the number of initial applications for unemployment benefits in the United States. And tomorrow will be published reports on the dynamics of British GDP and industrial production data. The economy is expected to grow 0.5% qoq in Q4 2020. Industrial production may show the same growth of 0.5% in December last year.

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EUR/USD. February 12, 2021 – The pair consolidates at 1.2100

The EUR/USD pair continues to consolidate in the 1.2100 area. Experts note that the instrument has already strengthened enough for traders to «take a break and look around».

Yesterday was published data on the number of applications for unemployment benefits in the United States: the indicator fell to 793 thousand against the level of last week at 812 thousand, while the forecast assumed a reduction in the indicator to 755 thousand. Analysts note that although statistics on the employment sector are not uniform, there are more and more positive facts in it.

As for the eurozone, here the short-term outlook looks worse than previously thought. According to experts' expectations, the eurozone's GDP in 2021 will grow by 3.8% against earlier expectations of a rise of 4.2%. At the same time, long-term expectations have improved: next year the European economy may grow by 3.8% instead of the previous forecast of 3.0%.

Today you should pay attention to the report on December industrial production in the euro area, as well as preliminary data on the consumer confidence index in the US for February. The forecast assumes growth to 80.8 points from 79.0 points earlier.

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EUR/USD. February 15, 2021 – Euro is stable at local highs

The EUR/USD pair continues to hold in positive territory above the 1.2100 level. The current quotation of the asset is 1.2135.

Today in the United States is a day off in honor of the President's Day, so the day promises to be calm. From economic statistics, it is worth highlighting only the publication on industrial production in January in the euro area: the decline in industrial production amounted to 1.6% after an increase of 2.6% mom in December. In addition, a meeting of the Eurozone finance ministers kicks off today. And Germany will publish a monthly economic report.

Friday's statistics from the US showed that the consumer confidence index from the University of Michigan fell to 76.2 points in February against the previous value of 79.0 and the forecast of growth to 80.8 points. Such indicators are the lowest for the last six months. The index of current economic conditions reflected a decline to 86.2 points in February from 86.7 in January. Thus, the US dollar will continue to weaken tomorrow, after the weekend.

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EUR/USD. February 16, 2021 – Euro continues to dominate against dollar

The EUR/USD pair continues its ascent on Tuesday. The current quote for the asset is 1.2163. The euro is strengthening, even despite yesterday's weak economic statistics from the eurozone: industrial production in the eurozone in December fell by 1.6% m/m, while the forecast expected a decline of 0.4% m / m. A month earlier, the indicator rose by 2.6% m/m. On an annual basis, the indicator declined 0.8% against the forecast of a decline of 0.3%.

Experts predict that in January and February similar indicators will be relatively similar, but in March the picture should change radically.

Today we should pay attention to the preliminary statistics on GDP in the Eurozone for the IV quarter. The indicator fell by 0.6%, which turned out to be better than the forecasted reduction by 0.7%. On an annualized basis, the region's GDP fell by 5%, which is also better than the forecast of -5.1%.

Also of interest are the data on economic sentiment in Germany from the ZEW: the index rose to 71.2 points, which is better than the forecast of a decline to 59.6. Considering the general weakness of the US dollar on the market and positive statistics from Europe, we can safely expect further growth of the European currency.

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GBP/USD. February 17, 2021 – Sterling started to decline from highs

On Wednesday, the GBP/USD pair declines moderately from 1.3950. The current quote for the asset is 1.3890.

The driver of the pound's decline was the strengthening of the US dollar in the market, which received support from a sharp rise in the yield of US debt bonds. However, the British currency does not intend to give up primacy so easily: the sterling receives strong support from the high rates of vaccination in the UK. Experts note that the rate of vaccination of the country's population is much higher than the world average.

Today you should pay attention to the publication of inflation data in Britain. The consumer price index in monthly terms decreased by 0.2%, which turned out to be better than the forecast of decline by 0.4%. Annual inflation in January accelerated to 0.7% from 0.6% in December. Also of interest are data on the price index of British producers: the indicator rose by 0.7%, while analysts predicted growth of 0.5%.

In the US, statistics on producer prices will be published in the same way, as well as on the volume of retail sales. In the evening hours, it is worth paying attention to the data on the volume of industrial production and the publication of the FOMC minutes.

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February 18 | Fundamental analysis of oil market

Brent quotes continue to renew multi-month highs: on Thursday, the asset quotes reached $65.40 per barrel. The last time at such marks the price of oil was in January 2020. The current Brent quote is $64.70.

The abnormal cold in Texas, which led to the suspension of the operation of several oil platforms, continues to contribute to the rise in prices. As a result, oil production in the United States fell by 2.6 million barrels per day. Combined with optimism about the rapid spread of vaccines in the world and a decrease in the number of coronavirus cases, this will lead to the fact that the bullish rally in oil prices will continue in the near future.

An additional local factor in the growth of Brent quotes was a report from the American Petroleum Institute (API), according to which US oil reserves fell by 5.8 million barrels over the week. Today you should pay attention to similar statistics from the Energy Information Administration (EIA) of the US Department of Energy. Analysts predict a decline in US oil reserves by 2 million barrels.

However, there are also risks. Experts note that the current rise in prices may lead to a revision of the terms of the OPEC+ deal at a meeting on March 3-4. It is also expected that Saudi Arabia may announce the cancellation of the unilateral production cut of 1 million barrels per day during February and March. In this scenario, the oil market may face a deep correction.

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EUR/USD. February 19, 2021 – Euro returns to growth

The EUR/USD pair is again approaching highs: the current quotation of the asset is 1.2140. The pressure on the dollar was exerted by yesterday's data on the number of claims for unemployment benefits in the United States: the indicator rose to 861 thousand against expectations of a decrease to 775 thousand. Such statistics indicate that the labor market in the United States remains unstable.

The data on the real estate market in January was also mixed. The number of building permits issued rose to 1.88 million from 1.70 million, while the number of new home starts fell to 1.58 million from the December level of 1.68 million. American businesses are still uncertain about future demand, despite low interest rates.

Today the macroeconomic calendar is quite diverse. The eurozone presented a preliminary index of business activity in the manufacturing sector for February: the indicator rose to 57.7 (better than the forecast of 54.3 points). A similar index in the service sector fell short of forecasts, falling to 44.7 points against growth expectations to 45.9.

In the evening hours, data on business activity will be presented by the United States. You should also pay attention to the important indicator of sales in the secondary housing market in January, which can demonstrate a local decline in the indicator. The Fed's monetary policy report will be released late in the evening.

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EUR/USD. February 22, 2021 – Euro grows weakly from the level of 1.2100

Last Friday, trading closed at 1.2100, and today the pair opens the day with growth to 1.2130. The European currency is supported by strong macro statistics from the Eurozone.

In particular, the February business activity indices of the Eurozone manufacturing sector were published last Friday. The indicator rose to 57.7 points against the forecasted decline to 54.3 points. The composite PMI of the euro zone was 48.1 points, while analysts had expected an increase to 48 points. At the same time, the indicator remains below the level of 50 points for the fourth month in a row, which indicates a decline in economic activity in the region.

On Monday, support for the European currency was provided by the data on the business climate index from IFO in Germany: the indicator rose from 90.3 to 92.4 points. Analysts had expected the index to reach 90.5 points. The index of business expectations in the largest European economy also came out better than forecast, showing an increase from 91.5 to 94.2 points.

The trading day promises to be calm, as the macroeconomic calendar is almost completely empty today. In the evening hours, you should pay attention to the speech of the ECB Heads Christine Lagarde.

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GBP/USD. February 24, 2021 – Sterling renews three-year high

The pound sterling continues to confidently renew highs, rising above the 1.42 level. The current quote for the GBP/USD pair is 1.4172. The last time such values ​​were observed at the beginning of January 2018.

The currency was supported by the speech of British Prime Minister Boris Johnson, who noted that he was satisfied with the rate of vaccination and the general epidemiological situation. The prime minister also announced a reduction in quarantine restrictions from March 8. Note that the rate of vaccination in the country today remains the fastest in the world.

Additional support for the British currency was provided by yesterday's data on the labor market in the UK. According to the United Kingdom Office for National Statistics, the unemployment rate rose from 5% to 5.1% in December, better than expected to rise to 5.2%. The number of applications for unemployment benefits fell by 20 thousand against the projected growth of 35 thousand. The average level of wages, taking into account bonuses, increased by 4.7%, experts had expected an increase of 4.1%.

Today you should pay attention to the inflation report from the Bank of England: as a rule, on its basis, the regulator decides on the further course of monetary policy.

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EUR/USD. February 25, 2021 – Euro hits local highs

On Thursday, the euro continues to rise, reaching 1.2233. The currency is still supported by macroeconomic statistics from Europe. According to the published data, the German economy grew by 0.3% in the IV quarter of 2020. The economic recovery was driven by the growth of investments (by 1%) and exports (by 4.5%), which offset the decline in consumer spending (by 3.3%) and government spending.

At the same time, a strong pressure on the US dollar was exerted by the speech of the head of the US Federal Reserve before Congress on Tuesday and Wednesday. Jerome Powell noted that the regulator intends to continue a soft policy without raising interest rates for a long period of time. Until inflation reaches the 2% target and employment returns to pre-crisis levels, rates will remain at historic lows.

Another important factor influencing the dynamics of the EUR/USD pair is the issue of agreeing on new fiscal stimulus measures in the United States. The Democrats are slated to pass a $1.9 trillion Senate bailout tomorrow, after which the bill will be sent to President Joe Biden for signature. If the stimulus package is adopted in full, huge cash infusions can accelerate inflation, which will have a very detrimental effect on the US currency.

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Brent. February 26, 2021 – «Black gold» is losing ground

The oil market began to correct: Brent quotes fell on Friday to $64.90 per barrel. Earlier, oil strengthened amid comments from the Fed about keeping interest rates at extremely low levels for a long time, until the regulator sees a noticeable improvement in the situation in the US economy. Additional support for oil quotes was provided by signs of recovery in energy demand, as well as a reduction in oil reserves in the United States. Since the peak levels of US crude oil inventories in June 2020, they have dropped by more than 90 million barrels, according to the latest figures from the US Department of Energy.

However, despite the positive external background, Brent still started to decline. The sell-off was driven by a general deterioration in market sentiment, which triggered a risk aversion for investors. Additional concerns are raised by the upcoming OPEC+ meeting next week, which is expected to change oil production quotas from April. Experts predict that the organization could discuss an increase in production by 500 thousand barrels per day.

It is worth noting that at the upcoming meeting, Saudi Arabia may announce the cancellation of the unilateral commitment to further cut production. And this could return another 1 million barrels of oil a day to the market. Thus, under these conditions, the decline in «black gold» may continue to $60 per barrel.

EUR/USD. February 26, 2021 – Euro fell to the level of 1.2100

On Friday, the euro began to correct, falling to the level of 1.2100. The dollar was supported by macroeconomic statistics from the United States: data on the volume of orders for durable goods in January reflected an indicator growth of 3.4% y/y, expecting an expansion of 0.9% m/m and the previous fact of a rise of 0.5% m/m.

GDP statistics for the IV quarter came out neutral: the economy grew by 4.1% against the forecast of growth by 4.2% and the previous estimate at 4.0%.

Positive news came from the employment market as well. The weekly report on the number of applications for unemployment benefits in the United States reflected a decrease in the indicator to 730 thousand against last week's data at 841 thousand and forecasts of about 828 thousand.

Today you should pay attention to the parameters of personal expenses and income of Americans for January. In terms of income, an increase of 9.4% is expected. In addition, the final value of the consumer confidence index from the University of Michigan for February will be published. If the data does not disappoint again, the dollar will continue to strengthen.

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GBP/USD. March, 1, 2021 – Sterling is back below 1.4000

At the end of last week, the sterling fell to 1.3890 amid the global strengthening of the US dollar in the market. The current quote for the GBP/USD pair is 1.3950.

The head of the Bank of England said last Friday that the regulator expects negative growth in the first quarter of 2021. Andrew Bailey also noted that several sectors of the economy, including retail, hospitality and tourism, were hit harder than expected by the second and third blockages. At the same time, the head of the Central Bank also noted good prospects, mainly due to the active recovery of the trade sector.

The regulator also said that inflation risks are generally balanced. And the rise in British securities yields is a consequence of more positive news in the economy, rather than worries about inflation.

The UK released preliminary February business data today. PMI in manufacturing rose better than expected: 55.1 points against the forecast of growth to 54.9 and the previous value at 54.1 points. In the evening hours, you should pay attention to the similar figure from the USA.

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USD/CAD. March 02, 2021 – Loonie weakens amid sales in the oil market

The USD/CAD pair dropped to the key support level of 1.25, which was already an obstacle in the way of the «bears» in 2016 and 2018. In 2021, the asset again failed to gain a foothold below this level and bounced off it, breaking through the resistance level of 1.27. The current quote for the pair is 1.2670.

The Canadian dollar was supported by a strong rise in oil prices to $66.75 per barrel last week. However, today oil is showing a correction, which also puts pressure on the CAD rate.

At the same time, the US dollar is receiving support from growing Treasury yields and positive economic statistics. In particular, in January, orders for durable goods grew by 1.4%, GDP in the IV quarter added 4.1%, and the number of applications for unemployment benefits amounted to 730 thousand, which is below forecasts.

Also, the dynamics of the dollar was influenced by the agreement in the US House of Representatives of Biden's proposed fiscal stimulus package in the amount of $1.9 trillion. Now the document must be approved by the Senate, and only then will it go to the president for signature.

On Tuesday, the RSI indicator is consolidating in the neutral zone, which signals the formation of a flat below the level of 1.27.

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EUR/USD. March 3, 2021 – The pair is volatile in the corridor 1.20-1.21

The EUR/USD pair demonstrates high trading volatility in the 1.20-1.21 range. The current quote for the pair is 1.2060. Such activity was caused, first of all, by the comments of monetary politicians. In particular, Fed Governor Lael Brainard said that the outlook for the American economy looks positive, since the vaccination process is at an active pace and means an early victory over the pandemic. However, this does not mean that the Fed will quickly roll back its stimulus programs.

Brainard also noted that someday the Fed will have the opportunity to raise rates, but such changes will occur gradually.

Today we should pay attention to the final values ​​of the index of business activity in the services sector for February in the eurozone and Germany. The index of the euro zone came out better than the forecast (45.7 against expectations of 44.7 points), but the German index fell short of expectations (45.7 against 45.9 points). In the evening hours, the US will present statistics on the number of jobs in the private sector from the ADP. Average forecasts assume growth by 203 thousand after strengthening earlier by 174 thousand. The stronger the report, the better for the dollar.

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GBP/USD. March 04, 2021 | Pound falls on weak statistics

The British pound weakened slightly during the trading session on Thursday. The current quote for the GBP/USD pair is 1.3950.

The pound was pressured by the weak macroeconomic data from Great Britain published yesterday. The index of business activity in the services sector in February fell from 49.7 to 49.5 points, and did not reach the level of 50 points. An additional driver of sales was the presentation of the UK budget, which provides for an increase in corporate taxes from 19% to 25% in order to combat the growing national debt of the country (2.1 trillion pounds). Also, the government will suspend the income tax thresholds until 2026.

Economic statistics from the United States came out ambiguous. In particular, the index of business activity in the service sector from Markit rose from 58.9 to 59.8 points, while the similar index from ISM, on the contrary, fell sharply from 58.7 to 55.3 points.

The markets were also somewhat disappointed by the ADP report on employment in the US private sector, which reflected the growth of jobs only by 117 thousand in February after increasing by 195 thousand in January. Today the focus is on the speech of the head of the US Federal Reserve Jerome Powell, as well as statistics on the dynamics of applications for unemployment benefits in the US.

EUR/USD. March 4, 2021 – Consolidation at 1.2050

The EUR/USD pair continues to trade within the 1.20-1.21 range. The current quote for the asset is 1.2050. Yesterday, the yield on US government bonds rose sharply, which contributed to the strengthening of the US dollar across the entire spectrum of the market.

However, the further rally of the dollar remains questionable, and the blame is weak macroeconomic statistics. According to the ADP, the economy created just 117,000 new jobs in February, which is significantly less than the forecast of 177,000. Activity in the service sector also slowed: the ISM index fell from 58.7 to 55.3 points. Today we should pay attention to the release of data on applications for unemployment benefits, it is expected that the figure will once again decline.

Also important will be the statistics from the eurozone, which can exert strong pressure on the euro. The 0.6% growth in retail sales in Europe is expected to be followed by a 1.2% decline. In other words, consumer prices have finally begun to rise, while sales have plummeted. This indicates the instability of inflationary processes in the region, and Europe may once again slide into deflation.

The RSI indicator has consolidated in the neutral zone, which signals the continuation of the sideways trend at 1.2050 until the release of economic statistics, which will determine the further direction of movement of the EUR/USD pair.

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EUR/JPY. March 08, 2021 | Consolidation at 129.00

During the trading session last week, the EUR / JPY currency pair formed on the daily chart a series of pin-bar and doji candlestick patterns at the resistance level of 129.00, giving a signal to sell.

Earlier, the EUR / JPY price renewed its maximum since November 2018 at 129.96, after which it corrected to the nearest strong support level - 129.00. There is still not enough strength to continue the upward trend, it may first be necessary to rewrite local minimums near 128.00, near the EMA 21 line.

Selling according to this pattern is risky because it is against the trend. I will monitor the appearance of buy signals. The immediate target for growth and strong resistance is at the round level of 130.00.

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EUR/USD. March 9, 2021 | Euro falls to 1.1830 after US Senate stimulus package

The US dollar continues to strengthen in the market, the current quotation of the EUR/USD pair is 1.1865. The American currency was supported by the adoption by the US Senate of the stimulus project in the amount of $1.9 trillion on Sunday. Trades in America are quite volatile due to fears of rising inflation, which may accelerate against the backdrop of new infusions of funds.

The EUR/USD pair may become one of the most vulnerable pairs this week. Moreover, the increased demand for the dollar and the «dovish» rhetoric of the European Central Bank may lead it to new 4-month lows.

In addition, the unexpected slowdown in industrial production in Germany from 1.9% to -2.5% also exerted strong pressure on the single currency. And combined with the low rates of vaccination, the protracted quarantine and the growth in the profitability of the public debt in Europe, this does not bode well for the euro.

Today it is worth paying attention to the third estimate of the eurozone's GDP, which should once again show an acceleration in the rate of economic decline from -4.3% to -5.0%. However, the two previous estimates showed the same results, and this fact is already incorporated into the value of the European currency. Therefore, we do not expect any strong movements during the day, and the pair will continue to trade in the area of ​​local minimums.

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EUR/USD. March 10, 2021 | Consolidation at 1.19

On Wednesday, EUR/USD consolidates at 1.1900 in anticipation of US February inflation data in the evening. The consensus forecast assumes an increase of 0.4 percentage points. up to 1.7%.

Such expectations are quite logical, since the rise in prices for industrial goods and energy resources contributed to an increase in the consumer price index. Fed Chairman Jerome Powell in his recent speeches also pointed to the rise in inflation in the next few months.

If analysts' forecasts come true, the dollar may strengthen somewhat, but high volatility should not be expected, as investors will refrain from opening positions before tomorrow's ECB meeting.

GBP/USD. March 10, 2021 | The pair is in the 1.39 area in anticipation of US inflation data

On Wednesday, the GBP/USD pair is trading with no definite direction in the 1.3900 area. Over the past two weeks, the pound has shown a downward correction, but investors continue to believe in the «bullish» outlook for the asset with a return to the level of 1.40.

This optimism was fueled by news that the UK authorities have decided to ease quarantine measures. Since Monday, for example, schools have started operating in the country. Additional support for the sterling was provided by yesterday's report on retail sales, which showed an indicator growth of 9.5% against expectations of an increase of 7.0%.

Today you should pay attention to the report on consumer inflation for February in the United States. Analysts expect inflation to rise by 0.4%. Such values ​​are clearly not enough for the FRS to somehow change the monetary policy, but they are quite enough to put pressure on the US dollar.

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EUR/USD. March 11, 2021 | The dollar is under pressure from the inflation report

On Thursday, the EUR/USD pair began to recover after falling the day before to the level of 1.1830. The current quote for the pair is 1.1965. The euro is growing for the third session in a row amid growing interest in risky assets.

An additional factor strengthening the pair was yesterday's statistics on inflation in the US. The report showed quite strong growth on an annualized basis (+1.7%), but if we consider the indicator of core inflation excluding food and energy prices, the growth remains very small. Such inflationary pressure will not be able to influence the Fed's rate decision, so Treasury yields began to decline, which led to a weakening of the dollar.

An additional negative factor for the American currency was also the report on the state of the budget, which showed an increase in the budget deficit to $ 311 billion from the previous value of $ 163 billion. And, of course, the completion of the discussion of the $ 1.9 trillion fiscal stimulus program is also exerting strong pressure on the dollar exchange rate today. The day before, the bill was approved in Congress and sent for signature to the President, who is expected to sign the law on Friday, March 12.

Today the ECB will meet to decide on interest rates. If the regulator calls for the continuation of the stimulus program, the EUR/USD buyers will have a stronger chance of testing 1.20.

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EUR/USD. March 12, 2021 | Euro sank after ECB meeting

The euro slipped somewhat after the ECB's decision to keep the rate at zero. The current quote for the EUR/USD pair is 1.1933. The European regulator managed to surprise the markets by announcing plans to significantly increase the rate of asset repurchases in the next quarter. The reason for this decision was the recent rise in government bond yields and fears about a possible jump in inflation in the coming months.

The ECB also raised its GDP and inflation forecasts for 2020 and 2021. This year, the economy is expected to grow by 4% and inflation by 1.5%. Experts note that until the eurozone economy shows a stable recovery, the euro will continue to lag behind its main foreign exchange competitors.

The US Federal Reserve will hold its meeting next week, during which updated economic forecasts will also be presented. Yesterday, the United States published good data on applications for unemployment benefits (712 thousand against the forecast of 725 thousand).

Today you should pay attention to statistics on producer prices and consumer sentiment from the University of Michigan. We are also monitoring the further fate of the US fiscal assistance package: it is expected that today President Joe Biden will finally sign the corresponding bill.

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GBP/USD. March 15, 2021 | The pair fluctuates weakly near the 1.3900 level

«Bears» for the GBP/USD pair failed to gain a foothold below 1.3860 and the pound began to gradually recover at the beginning of a new trading week. The current quotation of the asset is 1.3915.

Prior to that, the pair's decline was driven by disappointing UK GDP data. The indicator decreased by 9.2% (y/y) and 2.9% (m/m). Moreover, manufacturing output fell 2.3% in January.

The economic calendar for today is absolutely empty, so the trading day promises to be calm. It is also worth noting that investors took a neutral position, expecting a reaction to the injection of $ 1.9 trillion in fiscal stimulus into the US economy and the outcome of the two-day Fed meeting. In light of a serious rise in inflationary expectations (the University of Michigan believes that inflation may rise to 3.1%), the American regulator may nevertheless tighten its monetary policy.

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Brent. March 16, 2021 | Oil continues to decline

Brent crude oil continues to decline during the trading session on Tuesday, trading just below $68 a barrel. Previously, quotes were growing steadily amid hopes for a faster recovery in global economic growth due to the gradual lifting of quarantine restrictions in many regions of the world. However, investors are still worried about the emergence of new strains of coronavirus in Europe, and Italy has even announced the restoration of a partial lockdown in the country.

Despite the local correction, «black gold» retains the potential for further growth. On the side of buyers is strong statistics from China – the largest consumer of oil. Industrial production jumped 35.1% in January-February compared to the same period last year, according to Monday's data. Analysts had expected a more modest gain of 30.5%.

Market participants even assume that oil prices will be able to reach the level of $80 per barrel in the second quarter, after many quarantine measures are lifted and economic activity is restored. Experts predict that global oil demand will rebound by about 6 million barrels a day from last year, after falling by 8.7 million barrels a day in 2020. For the period 2021-2023 demand is projected to grow at more than 9 million barrels per day – the fastest pace since the 1970s.

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EUR/USD. March 17, 2021 | Dollar at 1.19 in anticipation of the results of the Fed meeting

On Wednesday, EUR/USD continues to trade at 1.1900 in anticipation of the results of the US Federal Reserve meeting, which will be announced tonight.

Yesterday's economic statistics put pressure on the dollar. Retail sales in February decreased by 3.0% m/m against the previous growth by 7.6% m/m (revised value). The forecast assumed a decline of only 0.5%. Analysts note that sales have deteriorated amid cold weather in the States this year.

The volume of industrial production in the US in February fell by 2.2% m/m against expectations of growth by 0.4% m/m and the previous rise by 1.1% m/m. This was also the result of an abnormally cold and snowy winter.

Today all traders' attention is focused on the decision of the US Federal Reserve on the rate and further course of monetary policy. The rate is likely to remain at zero, and the main interest is the press conference of the head of the FRS. The tone of J. Powell's comments may become a little more aggressive than before, however, one should not expect signals of a softening of the policy.

The economic calendar for today is practically empty, so trading will be held in a calm manner near the level of 1.19, until the announcement of the results of the Federal Reserve meeting.

GBP/USD. March 17, 2021 | Market participants awaiting the results of the US Federal Reserve meeting

The focus of traders this week is the meetings of the US and UK central banks. The US Federal Reserve will announce the results of its meeting tonight: analysts predict that the regulator will leave the current parameters of monetary policy unchanged, while raising the assessment of economic growth, as well as, possibly, inflation.

Based on the results of the December meeting, the leaders of the FRS predicted that the target inflation rate of 2% would be achieved no earlier than 2023. However, now the regulator may revise its forecasts towards accelerating inflation, given the recent macroeconomic data. And this will undoubtedly be a positive factor for the US dollar.

As for the Bank of England, which will meet on Thursday, economists believe that the Central Bank will continue to take a wait-and-see attitude and will keep its policy unchanged. Despite the fact that the yield on UK government bonds rose sharply amid expectations of a faster economic recovery and higher inflation. Moreover, yesterday the head of the Bank of England Andrew Bailey said that the bank will continue to buy bonds this year, despite the fact that «inflation will remain below the target of 2%.»

The current quote for the GBP/USD pair is 1.3900. The RSI indicator is growing weakly from the neutral zone, which signals further moderate strengthening of the pound sterling during the day, until the announcement of the results of the US Federal Reserve meeting.

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EUR/USD. March 18, 2021 | The results of the Fed meeting put pressure on the dollar

On Thursday morning, the euro continues to rise to the 1.20 area. The current quote for the EUR/USD pair is 1.1986. Yesterday there was a meeting of the US Federal Reserve System, as a result of which the American currency significantly weakened, having lost control over the level of 1.19.

As market participants expected, the regulator kept the base rate at the level of 0-0.25% per annum. The Fed also made it clear that it does not intend to raise interest rates throughout 2023, despite the rapid recovery of the American economy.

The central bank also improved its forecast for US GDP: now the regulator predicts economic growth by 6.5% in 2021, not 4.2%. Moreover, inflation is expected to exceed the Fed's 2% target this year at 2.4%.

Today you should pay attention to the macro statistics on the US labor market. Analysts expect that the number of initial claims for unemployment benefits fell by 12 thousand from the previous week, to 700 thousand. If the forecast is confirmed, the US dollar will have an incentive to recover from yesterday's drawdown.