Here's the details of the economic calendar for May 18:

The data on the UK labor market was published yesterday, where the unemployment rate declined from 4.9% to 4.8%, while employment is rising at a rapid pace of +84 thousand, against the forecast of +50 thousand.

At the same time, applications for unemployment benefits declined by -15.1 thousand, albeit expected to grow by +25.6 thousand.

The UK statistics supported the pound, which was reflected in the market by an increase in the value of the currency.

As for Europe, the second GDP estimates for the first quarter were published, which reflected a deceleration again in the economic slowdown from -4.9% to -1.8%.

During the time the EU statistics were published, the euro stood still, as expectations for GDP coincided with the forecast, and the European currency was already on an upward cycle.

During the American trading session, the United States released its construction data, where the volume of April new home construction fell by 9.5%, but the number of permits issued in the same time period increased by 0.3%, which can be considered as insignificant.

Analysis of trading charts from May 18:

The EUR/USD pair continues to follow an upward cycle from the recently broken through support area of 1.1950/1.2000/1.2050. Moving ahead, traders have already overcome a number of important levels, but this does not stop buyers, and the quote has already reached the local high of 1.2242 from February 25.

We have been considering trading recommendations for buying the euro since last week, and they are still relevant and bring us profit.

In turn, the British currency approached the area of the high of the mid-term trend of 1.4180/1.4224 during the upward cycle, where, on a natural basis, there was a reduction in the volume of long positions (buy positions) and as a result, stagnation/pullback.

Trading recommendations from May 18 considered the scenario of slowing down the upward activity within the local high of the medium-term trend, so we were ready for the end result.

Trading recommendation for EUR/USD and GBP/USD on May 19, 2021

Today, the UK has already released its inflation data, where the consumer price index shows an increase from 0.70% to 1.50%, which is ahead of the forecast by 0.10%. The forecast was 1.40%.

The pound sterling did not react to the inflation data, since traders are still likely analyzing the indicators.

The European Union will also publish its inflation data at 9:00 Universal time, where the consumer price index is expected to rise from 1.30% to 1.60%

From the point of view of fundamental analysis, the growth of inflation is considered a positive phenomenon for the national currency, but speculators may work out the news differently this time.

Following the close of the European session, the minutes of the Fed's previous meeting will be published, where traders will pay special attention to the text and wording regarding the rapid inflation growth and possible actions to control what is happening by the regulator.

Due to the fact that the minutes will be published quite late at 18:00 Universal time, the market reaction will be during the Asian session of the new trading day.

Looking at the EUR/USD trading chart, it can be seen that the upward trend has already led to the renewal of the local maximum from February 25, which leads to a further increase in the volume of speculative transactions in the market.

If the price keeps above the coordinate 1.2250 for at least an H4 period, a subsequent movement towards the local high (1.2349) of the medium-term trend is not excluded.

As for the GBP/USD trading chart, the pullback/stagnation stage can be observed, relative to the resistance area of 1.4180/1.4224. A possible price rebound from the resistance area cannot be ruled out in this situation, where the logical basis of the past still takes place. However, speculative hype prevails in the market.

In this case, two scenarios will be considered at once:

The first scenario is based on the natural basis of a rebound, where keeping the price below the level of 1.4160, with the manifestation of downward interest, may lead to a movement towards 1.4100.

The second one considers the prolongation of the medium-term trend, if the price is kept above the level of 1.4224 for at least an H4 time frame.