The US dollar was able to hold its previously gained positions, but there were no drastic changes observed in the market.
Considering yesterday's economic calendar, we had the publication of Europe's final data on the business activity index in the manufacturing sector, where growth was recorded from 54.8 points to 57.9 points. However, the growth forecast by 0.2 did not affect the Euro currency in terms of dynamics and its strengthening.
At the same time, weak data on the credit market was also released in the UK, where consumer loans declined by 2.4 billion pounds. In total, the lending market has fallen by 6.2 billion pounds for the past five months. Thus, so far, there is no reason to resume its growth.
In defense of the pound sterling, it can be noted that the data published synchronously on the index of business activity in the manufacturing sector turned out to be better than the preliminary estimate – the index rose from 54.1 points to 55.1 points. But unfortunately, nothing significant has happened in the market even with this margin of error.
The EUR/USD pair managed to update Friday's local low. As a result, the price approached the area of the psychological level of 1.2000.
The GBP/USD pair continues to focus below the area of the psychological level of 1.3950/1.4000/1.4050, leaving sellers expecting for the pound to further weaken.
Trading recommendations for EUR/USD and GBP/USD on March 2, 2021
Today, important statistics will be published. The main data is the preliminary estimate of inflation in the Eurozone, which is expected to continue rising from 0.9% to 1.0%. Such optimistic expectations are likely to provoke the European Central Bank to think about slightly adjusting the monetary policy, namely by its tightening. If so, investors' interest will rise, which leads to an increase in bond yields. All things considered, this can positively affect the euro's growth.
10:00 Universal time - EU inflation
Looking at the EUR/USD pair trading chart, one can observe that the price is moving within the deviation of the level of 1.2000, from which the volume of short positions were lowered. This can result in a natural price rebound in the direction of 1.2070.
An alternative scenario of the market development considers the prolongation of the January correction. In this case, the quote must stay below the 1.1980 level in the H4 time frame. After that, it may break through the local low of 1.1952 from February 5.
As for the GBP/USD pair trading chart, it can be seen that the quote has already broken through last week's low, where the area of the psychological level is recovered in the market as resistance. In this case, the previously set downward interest towards the level of 1.3750 is likely to be maintained.
