The value of the US dollar slightly lost against its competitors yesterday, but this did not prevent traders to turn away their focus from it.

• Its value declined around 0.10% against the euro in the EUR/USD pair
• Its value declined around 0.28% against the pound in the GBP/USD pair

In terms of the economic calendar, the first estimate of the US GDP in Q4 was published, with a forecast growth of 4.2%. But contrary to this optimistic forecast, GDP only rose by 4.0%, which disappointed local traders. The US dollar also lost its position.

Together with the GDP data, United States' weekly values on applications for unemployment benefits were also released, where their volume was expected to slightly decline or remain unchanged. Fortunately, the result of the labor market pleased investors.

• Volume of initial claims for benefits declined from 914 thousand to 847 thousand, against the forecast of 875 thousand.
• Volume of repeated applications for benefits was expected to remain at the level of 5,054 thousand, but as a result, the previous data were revised for the better: 5,054 ---> 4,974. The current figures came out with an impressive margin of 4,771 thousand.

As a result, the labor market showed a significant recovery, which was extremely noticeable in the market.

What happened on the trading chart?

Yesterday, the EUR/USD pair showed a local upward interest in the first half of the US session, where the quote locally surged towards the previously known coordinate 1.2130. It was followed by a slow down and the quote's reversal.

The GBP/USD pair found a pivot point in the area of 1.3650, where a stop and a price rebound occured in the direction of the local high of the mid-term trend.

It is worth noting that market participants have been following the course of the side channel of 1.3650/1.3750 for more than a week, periodically hitting the specified limits.

Trading recommendations on EUR/USD and GBP/USD for January 29, 2021

Important statistics are not expected to be published today. Therefore, traders will most likely continue to recover all the positive data from the US labor market.

If we analyze the current trading chart of EUR/USD, it can be seen that the recovery process has already led the quote to the base area of the previous day, where market participants could try to test the strength of the support area of 1.2050/1.2070 once again.

To make key changes in the market, it should be considered that the quote must remain below the level of 1.2050 in an H4 time frame, which will automatically prolong euro's January correction movement.

If the price fails to properly consolidate below the level of 1.2050, further amplitude fluctuations above this coordinate will not be ruled out.

As for the current trading chart of the GBP/USD, it can be seen that the quote continues to follow the side channel of 1.3650/1.3750, where market participants made a rebound again from the upper limit and are heading towards the coordinate of 1.3650.

A movement on a rebound in a side channel is still relevant and is used by traders in the market. It is worth considering that the main change in the price will occur after the limit of a particular range breaks down.