EUR/USD, EUR/GBP and GBP/USD consolidate
Outlook on EUR/USD, EUR/GBP and GBP/USD ahead of UK inflation data releases
EUR/USD consolidates below November and December peaks
Last week EUR/USD topped out at $1.1009, marginally below its November peak at $1.1017, as comments by European Central Bank (ECB) president Christine Lagarde, in which she said interest rate cuts had not been discussed during the last week’s policy meeting, provoked a sell-off.
EUR/USD thus dropped back below its late August high at $1.0945 to $1.0889. Further minor support is seen around the 14 November high at $1.0887 and the 22 November low at $1.0852. Only a rise above $1.1009 to $1.1017 would put the 10 August high at $1.1065 on the map.
EUR/GBP trades around the £0.8600 mark
EUR/GBP’s drop from Thursday’s £0.8634 high to Friday’s £0.8572 low has been followed by a bounce back to the £0.86 region around which it is now trading ahead of Monday’s Germany Ifo business climate and Wednesday’s UK inflation Producer Price Index (PPI) and RPI data releases.
Resistance above £0.8634 is seen along the 200- and 55-day simple moving averages (SMA) at £0.8662 to £0.8668 and support below Friday’s £0.8572 low around the current December trough at £0.855.
GBP/USD comes off last week’s near four-month high
GBP/USD, which last week rose to a near four-month high at $1.2794, is seen slipping towards its $1.2617 mid-August low amid negative divergence on the daily Relative Strength Index (RSI), pointing to a potential retracement lower soon being witnessed.
Below $1.2617 the November-to-December uptrend line can be found at $1.2542. Resistance sits at the November and current December highs at $1.2733 to $1.2794. If overcome, the 10 August high at $1.2819 would be eyed next.
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