The US dollar continued to strengthen against its competitors yesterday. Perhaps, the impulse for action is the minutes of the European Central Bank's December meeting, where members of the governing council agreed that the asset purchase program should be expanded, but without naming the exact volumes.

In terms of statistics, weekly data on the number of applications for unemployment benefits was published during the start of the US trading session. Their volume was predicted to decline, but as a result, a quite impressive growth was recorded.

• Volume of initial applications rose by 181 thousand – from 784 thousand to 965 thousand.
• Volume of repeated applications rose by 199 thousand – from 5,072 thousand to 5,271 thousand.

The market did not react immediately, but the volume of dollar positions began to actively decline after an hour the above-mentioned statistics were published.

What happened on the trading charts?

The EUR/USD pair declined around 9:00 Universal time, locally breaking through the pivot point of 1.2130. However, the downward movement slowed down after the publication of negative statistics in the US labor market and so, the quote returned to the area of 1.2130/1.2175 again.

The total volume of fluctuation was slightly more than 60 points.

The GBP/USD pair returned to the area of the local high of the mid-term upward trend of 1.3690/1.3705, where a natural decline in the volume of long positions (buy positions) was observed. This led to a stagnation-pull back.

The local upward trend coincides with the time of release of negative statistics in the US.

The total volume of fluctuation was slightly above 90 points.

Trading recommendations on EUR/USD and GBP/USD for January 15, 2021

A lot of UK statistics has already been published today. The monthly GDP data for November slowed down by -2.6%, against the worse forecast of -5.7%. At the same time, the volume of industrial production reflects a slowdown in the decline – from -5.8% to -4.7%, with a forecast of -4.2%.

However, the pound hardly reacted during the time of publication of the statistics.

In the afternoon, the publication of data on US retail sales can be expected, where a neutral level of 0% is forecast for December. For example, November's volume of retail sales fell by -1.1%, and so, the neutral level can be regarded as a positive factor.

According to the trading chart of EUR/USD, price fluctuations within the lower limit of the sideways range of 1.2130/1.2175 is seen. Based on the recent breakdown of the level of 1.2130, the downward interest is still relevant in the market.

It is advised to carefully monitor the behavior of the price within the range of 1.2110/1.2130, since holding the quote at these levels can open the way to the levels of 1.2070 - 1.2000.

As for the trading chart of GBP/USD, it can be seen that there is a pullback from the resistance area of 1.3690/1.3705. In case of a regular repetition associated with this area, a decline to at least 1.3615 can be expected. Now, if the price is held below the level of 1.3600, further decline can continue to the level of 1.3500.

An alternative scenario of market development will be considered if the price is held above the level of 1.3710 in a four-hour time frame, which will lead to further formation of a mid-term trend.