Euro loses momentum as sterling fails to rally

Markets are relatively muted as investors prefer to remain on the sidelines ahead of key data later this week.

Euro and dollar notes
Source: Bloomberg

Euro buoyant ahead of key inflation data

EUR/USD is trading at $1.1299, down 0.21% after failing to breach its 50-hour moving average at $1.1336 – an area likely to the continue to act as topside resistance over the near term which, when coupled with a contractionary reading of 37, is likely to see a continued move lower bringing $1.1186 into play.

Key downside support is placed at the $1.1291 level, which if held – as it has previously done on multiple occasions – could lead to a retest of the pair’s 50-hour MA.

Euro pairs are likely to remain relatively buoyant ahead of German inflation data – scheduled for release on Thursday – which is expected to come in at -1.0%, unchanged month on month. 

Spot FX EUR/USD chart

Sterling fails to rally on positive data

GBP/USD is trading at $1.5215, adding 0.01%, and remaining relatively unchanged following the release of the UK’s manufacturing production data which came in at 0.1%, beating market expectations of a fall to -0.1% from 0.8% month on month.

The pair most recently failed to break above key resistance at the $1.5253 level, which is likely to continue to be the case over the near term.

The next clear downtrend – supported by a contractionary reading of 40 in its relative strength index – is likely to be seen at the pair's 200-hour MA at $1.5162.

Spot FX GBP/USD chart

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