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EUR/USD and GBP/USD await US CPI data, EUR/GBP side-lined

EUR/USD, EUR/GBP and GBP/USD continue to be short-term side-lined ahead of key US CPI data.

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​EUR/USD recovers from breached resistance line, now support line

EUR/USD’s retracement from its January and early February highs at around $1.1483 did a ‘return to point of breakout’ by slipping back to the breached 2021-to-2022 downtrend line, now because of inverse polarity a support line at $1.1392, before stabilising above it.

Slightly further down the late November and December highs at $1.1386 to $1.1382 may act as additional support as well as the mid-point of Thursday’s long ‘body’ of its candle at $1.1368 ahead of today’s US consumer price index (CPI) data. The ‘body’ shows the distance between the open and the close of a candle.

The January and current February highs at $1.1382 to $1.1383 will need to be exceeded for EUR/USD to continue its ascent towards the next higher October and 5 November lows at $1.1513 to $1.1529.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

EUR/GBP is side-lined

EUR/GBP continues to oscillate around the 55-day simple moving average (SMA) at £0.8425, having found minor support at £0.8413 over the past couple of days.

While this level underpins, resistance above Monday’s high at £0.8478 may be revisited and perhaps also the 2020-to-2022 downtrend line at £0.8486 and even the 200-day SMA at £0.8512.

A slip through the £0.8413 low would probably lead to a tumble back towards the November trough at £0.8381 being seen.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

GBP/USD still hovers above minor support ahead of US CPI data

GBP/USD saw a minor retracement from its early February high at $1.3628 to the mid-November high, 38.2% Fibonacci retracement and 6 January low at $1.3513 to $1.349 from where it recovered. Further sideways trading is expected to be seen whilst awaiting US CPI readings later today.

For now, yesterday’s high, two-month downtrend line and 61.8% Fibonacci retracement at $1.3589 to $1.3599 are expected to put a lid on the cross. Slightly above this resistance sits the recent $1.3628 high.

Only a slip through Monday’s $1.349 low would have bearish implications and would push the $1.3442 to $1.3431 support zone to the fore. It consists of the early and late January lows and the 55-day SMA. Further down lies the January trough at $1.3359.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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