EUR/USD Approaches Key Level
For the past week, the Euro has been recovering against the dollar, after being on a downtrend since the start of June.
The US currency gained strength after the Federal Reserve uttered some hawkish comments on raising rates twice before the end of 2023. The central bank also hinted at scaling back the $120 billion monthly bond purchases, following the continuing economic rebound.
Meanwhile, the Euro has recovered some losses, and it is now approaching a key area around 1.20, which has acted as a major support/resistance before.
The dollar index ended the week lower, as US consumer spending data showed stagnation in May. The Core PCE Price Index plunged from 0.7% in April, to 0.5% in May.
A survey by the University of Michigan, released on Friday, also showed that the Consumer Sentiment Index rose by 3.1% in May to
85.5 in June. Analysts expected a slightly bigger increase of the sentiment index, to 86.5.
EUR/USD 1Day Chart
Moving Averages Keeping EUR/GBP Buyers in Check
EUR/GBP has been declining since November last year, but the real bearish trend started in early January, after the EU and the UK reached the long-awaited trade deal. That validated the Brexit deal reached two years ago, which would have been useless without the trade deal.
This forex pair lost around 7 and a half cents from the top during Q1, as the EUR/GBP rallied around 10 cents higher, while the EUR/USD turned down in Q1, as the USD started gaining some ground after declining since March last year. In early April, we saw a jump, as the Euro increased again, although it wasn’t long before the EUR/GBP started sliding lower again.
It hasn’t exactly resumed the bearish trend yet, since it will have to break below the March lows for the bearish trend to officially resume. But moving averages are doing a great job in providing resistance at the top and pushing this pair further down.
The 100 SMA (green) in particular, but also the 50 SMA (yellow), which has now moved above the price, have been doing a great job as resistance at the top on the EUR/GBP daily chart. Now the price has retraced higher, getting close to these 2 MAs, so this looks like a good opportunity to go short on the EUR/GBP, which we already did last week.
EUR/GBP is about to reverse down again
GBP/USD On a Bearish Run – Three Black Crows to Drive Selling!
During Tuesday’s Asian trading session, the GBP/USD currency pair failed to extend its bullish bias of the previous day, edging lower to around the 1.3866 level, mainly due to the prevalent downbeat market sentiment, which underpinned the US dollar and contributed to the currency pair’s losses. Besides this, the selling bias surrounding the currency pair could also be tied to a resurgence of the Delta variant of COVID-19, which keeps raising doubts over economic recovery in the UK. Despite the ever- increasing number of cases of the Delta variant, UK Prime Minister Boris Johnson remained confident about lifting coronavirus restrictions on July 19.
Furthermore, the sentiment regarding the sterling was further hit due to the no-show by the Bank of England (BOE) in its July monetary policy meeting. The central bank warned against “premature tightening” of policy, and adopted a watch-and-wait approach. In contrast to this, the positive vibes from the EU over the Brexit matter may help to limit deeper losses in the GBP/USD currency pair. Meanwhile, UK Prime Minister Boris Johnson is still showing his willingness to lift coronavirus restrictions on July 19. But the Pound sterling failed to cheer these positive updates, as mixed news over the coronavirus (COVID-19) has disappointed buyers. The GBP/USD is currently trading at 1.3873, and consolidating in the range between 1.3859 and 1.3888.
GBP/USD – Daily Support and Resistance
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