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13.04.202108:57 Forex Analysis & Reviews: Trading plan for EUR/USD and GBP/USD on April 13, 2021

Since early Tuesday, both the single European currency and the pound sterling have been developing a steady rally. The sterling has been growing to a greater degree. Interestingly, EUR's growth rests on solid fundamentals whereas GBP has been on the rise without any weighty reasons. Of course, progress in mass vaccination in the UK is the matter of fact. London reports on interim results regularly. However, there is nothing new about it. Market participants are well aware that the UK is implementing the vaccination campaign faster than other countries. The full vaccination is out of the question so far. Nevertheless, even 29.8% of the vaccinated population is a decent interim result. Notably, London reported on such progress after the sterling had been trapped in the flat market. In other words, the sterling had climbed before it entered the sideways stage. GBP gained ground as a result of an ordinary technical bounce. GBP was trading lower for the whole last week. It weakened notably last week. Hence, a bounce and an upward correction came as no surprise.

Exchange Rates 13.04.2021 analysis

Yesterday, the single European currency received a boost from a report on the EU retail sales which came in beyond expectations. Retail sales for February were upgraded to -5.4% from -6.4% in the flash estimate. The fact of the big upward revision is bullish for EUR. Besides, retail sales eased a slowdown to -2.9% in annual terms in February. Indeed, retail sales are still on the negative territory, but the fact that a slowdown is moderating its pace indicates the green shoots of recovery. In other words, economists expect to see robust consumer activity in the near future. Such a revival in retail sales is going on amid rising consumer inflation. In turn, corporate earnings will go up so that companies will be able to create more new jobs that will push unemployment rates down. At the same time, there is a risk that such a robust consumer activity will pump up inflation. Meanwhile, market participants attach importance to the fact of growing consumer activity.

Retail Sales (EU)

Early today, investors found out positive news from the UK. Industrial production slowed down a pace of contraction to -3.5% from -4.3%. Importantly, the previous data was also upgraded from -4.9%. Analysts had projected a minor uptick in industrial output to -4.8%. All in all, the British industry feels much better than expected. The sterling gave a muted response to such news as data on industrial production is of secondary importance from the point of financial markets.

Industrial Production (UK)

Exchange Rates 13.04.2021 analysis

The single European currency was trading in the red in the European pre-market. Recently, EUR has been trading with muted moves. EUR is trading lower ahead of the publication of the US inflation data. The CPI is expected to accelerate to 2.6% in March from 1.7% in February on year. As we see, analysts predict a notable inflation rise. In principle, this could confirm fears that consumer inflation in the US is on track for rampant acceleration. In turn, this could assure the central bank to resort to emergency measures. Investors are mostly worried that the Federal Reserve does not foresee such prospects. So, the regulator's countermeasures could catch investors completely off-guard. Unfortunately, such a twist would be an unpleasant surprise. To sum up, investors are likely to be alarmed by rising inflation that will drag down the US dollar.

Consumer Price Index (US)

Exchange Rates 13.04.2021 analysis

EUR/USD is still trading higher, having rebounded off support at 1.1700. The pair is moving inside the range of 1.1860 – 1.1920. These levels coincide with support and resistance. So, the price is expected to fluctuate in between.

Exchange Rates 13.04.2021 analysis

As expected, GBP/USD is trading at 1.3669, the lower border of the upward correction. Traders are opening speculative long positions towards 1.3775. Following the recent surge, the currency pair is likely to get stuck in the range of 50-60 pips. Market participants consider this sideways stage to be a pause before a jump.

Exchange Rates 13.04.2021 analysis

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