The US dollar gained local support yesterday, but this did not result in anything dramatic in the market.

The data on UK inflation was published on the economic calendar. It accelerated from 0.3% to 0.6%, which positively affected the pound's value at the time of the statistics release.

The Eurozone also published its inflation data, which confirmed not the best expectations. The inflation rate has been falling for five consecutive months and the scale of deflation is -0.3%.

The price of the euro declined during the time these statistics were published.

What happened on the trading chart?

The EUR/USD pair returned to the limits of the range of 1.2130/1.2170 after rebounding from the local high (1.2059) on December 9. This negatively affects the volume of long positions (buy positions). It was precisely from this range that a round of short positions appeared yesterday.

The GBP/USD pair reached again the resistance area of the mid-term upward trend of 1.3690/1.3710, where a local pullback of 90 points occurred. However, the pair continued to focus on the peak of the trend.

Trading recommendations on EUR/USD and GBP/USD for January 21, 2021

The weekly data on US unemployment claims will be released today, which is expected to rise.

• Volume of repeated applications for benefits is expected to grow by 129 thousand.
• Volume of initial applications is expected to decline by 55 thousand.

USA 13:30 Universal time - Applications for benefits

The main event is the European Central Bank (ECB)'s meeting, which has no choice but to further expand the quantitative easing program again, after the release of inflation data. Such a rapid easing of monetary policy can greatly frighten investors, which will lead to the euro's weakening.

EU 12:45 Universal time - ECB meeting results

13:30 UTC+00 - Press conference and ECB commentary on monetary policy

If we analyze the current trading chart of the EUR/USD, it can be seen that the price range of 1.2130/1.2170 still negatively affects buyers in terms of reducing the volume of long positions. We can assume that if the quote still fails to consolidate above the level of 1.2170 in the H4 time frame, then sellers will have a chance to resume the correction course in the direction of 1.2060-1.2000.

As for the current trading chart of the GBP/USD, it can be seen that the quote is moving within the local high of the mid-term upward trend, where the area of 1.3690/1.3710 will continue to put pressure on buyers. This may affect the volume of long positions.

There will be a rebound in the direction of 1.3630-1.3550 if the previous significant area of 1.3690/1.3710 will be broken again.

It is worth considering that the breakdown of the 1.3690/1.3710 area and the continuation of the medium-term trend can only be considered if the price holds above the level of 1.3710 in the daily time frame.