25.12.2020:Changes in European currencies during Christmas holidays. Outlook for EUR/USD and GBP/USD

Описание: It is really good that markets will be closed for some days. Now, investors have time to examine the current situation. Boris Johnson’s speech provided during yesterday’s press conference has worried markets.
The UK Prime Minister said that the agreement would be signed only to avoid the economic chaos. The pound sterling dropped amid such words. It seems that the UK agreed to sign the agreement despite not very beneficial conditions. Thus, some analysts suppose that the UK made too many concessions that may lead to serious consequences. During the long holidays, investors will have time to examine the document.
If according to the agreement, the UK remains in the EU free trade area, the pound sterling will resume falling at the beginning of the next week. If this prediction comes true, the UK will have to comply with the requirements and regulations applied to this area. However, leaving the European Union, Great Britain loses an opportunity to change the standards. In this case, it has to obey the rules developed by Brussels violating its own sovereignty.
Nevertheless, the pound sterling jumped amid expectations of a positive outcome of the trade talks. The price reached the local high of the mid-term uptrend. Buyers failed to break the area of 1.3600/1.3625 amid small trading volumes caused by an early closure of markets. However, it is also possible that traders had priced in the data before that moment.
Early next week, the British pound may resume falling from the local high. It has room to drop due to the overbought conditions.

At the same time, the euro ignored positive news about Brexit. Traders were getting ready for Christmas showing low activity of over 30 pips.
It is quite possible that the euro/dollar pair will continue trading in a narrower range of 1.2150/1.2220.
If the pair fixes below 1.2150 on the four-hour chart, it may show a full-scale downward correction after the mid-term uptrend.
However, if the pair breaks the level of 1.2220, it may start trading in a wider range of 1.2150/1.2275.

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