The euro eases off ahead of US inflation reading while GBP/USD continues to look bid

EUR/USD resumes its early January descent ahead of US inflation data

EUR/USD is giving back much of Friday’s gains as investors look forward to another U.S. inflation reading that could well set the seal on an early rate hike from the US Federal Reserve (Fed).

Downside targets are the one-month support line at $1.1287 as well as the late December low and the November-to-December channel support line at $1.1274 to $1.1266. Further support lies between the 7 and 20 December lows at $1.1237 to $1.1222 and at the November low at $1.1186.

All these levels are being targeted while no currently unexpected rise above last week’s high at $1.1365 is seen. If so, the mid-December and 29 December highs at $1.136 to $1.1369 would be back in the frame.

Key resistance remains to be seen between the late November and December peaks at $1.1382 to $1.1386. While the cross stays below it, the one-year downtrend retains the upper hand.

EUR/GBP flirts with support at £0.8335, a slip through which would eye £0.8313 to £0.8277

EUR/GBP is once more pounding this year’s low to date at £0.8335, a slide through which would eye the December 2016, April 2017, December 2019 and February 2020 lows at £0.8313 to £0.8277. This area represents key long-term support which is expected to withstand the first test.

Initial resistance is found between the October and November lows at £0.8381 to £0.8403.

While the next higher early January high at £0.8418 isn’t overcome, the downtrend – which has been in place since September of last year, remains firmly in charge.

GBP/USD is having another go at breaking through the $1.360 mark

Over the last few days GBP/USD has been attempting to rise above its early January high at $1.3598 and reach the eight-month downtrend line at $1.361 but so far to no avail.

While the one-month support line and the December high at $1.3555 to $1.3551 underpin, however, upside pressure should be maintained. Further, minor support comes in at the $1.3514 mid-November high.

A rise and daily chart close above the downtrend line at $1.361 would open the way for the November high and 200-day simple moving average (SMA) at $1.3699 to $1.37 to be reached.