EUR/USD and GBP/USD attack resistance, EUR/GBP drops to 200-day simple moving average
EUR/USD and GBP/USD probe minor resistance while EUR/GBP drops to the 200-day simple moving average around which it may stabilize ahead of UK April inflation and retail sales data.
EUR/USD nears one-month resistance line
EUR/USD’s bounce off last week’s low at $1.035 amid worries of a looming recession and diverging monetary policies between the European Central Bank (ECB) and the US Federal Reserve (Fed) is approaching the April low and one-month resistance line at $1.0471 to $1.0473 ahead of today’s US April retail sales and industrial production data releases.
Minor resistance above this zone is seen at Thursday’s $1.0529 high.
The long-term downtrend will remain firmly in place, though, as long as the next higher early May high at $1.0642 isn’t bettered. The $1.035 to $1.0341 January 2017 and last week’s lows are thus expected to be revisited and to then to give way with the major psychological $1.0 mark, or parity, being in focus.
EUR/GBP weighs on the 200-day simple moving average ahead of UK inflation data
EUR/GBP’s bearish reversal off last week’s £0.8618 high has taken it back to the 200-day simple moving average (SMA) at £0.8446, ahead of this week’s UK consumer price index and retail sales data, out tomorrow and on Friday respectively. Around it and the one-month uptrend line at £0.8442 the cross may stabilise today.
Should this not be the case, we would have to allow for the 55-day SMA at £0.839 to be reached, together with the early May low at £0.8368.
Only a bullish reversal and rise above today’s high at £0.8475 would put the £0.85 region and the late March high at £0.8512 back on the map. While the next higher high from yesterday at £0.8534 isn’t bettered, however, downside pressure should prevail.
GBP/USD’s relief rally has further to run ahead of UK data
The slide in the GBP/USD seems to have ended at last week’s $1.2156 low ahead of this week’s April UK consumer price index (CPI) and retail sales data which are due to be published tomorrow and on Friday respectively.
The cross is in the process of heaving itself back up to its April low at $1.2412 as UK April unemployment data comes in lower than expected at 3.7% versus an expected 3.8% as was the case in the previous month. The March claimant count has been revised from -46.9k to -81.6k with the April count change coming in at -56.6k. Above the $1.2412 level beckons the minor psychological $1.25 mark.
As long as the next higher $1.2638 early May high isn’t exceeded, the long-term downtrend in the currency pair remains in play with the minor psychological $1.20 region representing a possible downside target zone.
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