EUR/USD, EUR/GBP and GBP/USD post ECB rate hike, ahead of FOMC and BoE rate decisions
Outlook on EUR/USD, EUR/GBP and GBP/USD following last week’s ECB rate hike ahead of this week’s Fed and BoE monetary policy meetings.
EUR/USD trades in 3 ½ month lows post ECB rate hike
Last week EUR/USD briefly dropped below its $1.0636 May low to $1.0632 following the European Central Bank’s (ECB) tenth rate hike in a row to 4.00% on its deposit rate and its dovish outlook. This week traders await the Federal Reserve’s (Fed) rate decision, expecting it to keep rates on hold.
A slide through and daily chart close below Thursday’s low at $1.0632 could lead to a drop towards the January and March lows at $1.0516 to $1.0484. For now the cross seems to hold, though, and while it continues to do so, the 7 September low at $1.0687 may be revisited.
Provided the currency pair remains below the last reaction high at $1.0769, seen last Tuesday, the July-to-September downtrend remains intact.
EUR/GBP traders await Fed and BoE rate decisions
EUR/GBP remains within its June-to-September sideways trading range, now back above its 55-day simple moving average (SMA) at £0.8583, as traders await a rate decision by the Bank of England (BoE) on Thursday. The majority of analysts expect a fifteenth consecutive rate hike to 5.5%.
Only a rise above last week’s high at £0.863 would push the $0.8658 to $0.8669 June and August highs to the fore.
Minor support is seen along the 55-day SMA at £0.8583 and at Friday’s £0.857 low. While it continues to hold, immediate upside pressure should be maintained.
GBP/USD trades below its 200-day SMA
GBP/USD continues to slide as the majority of traders is expecting to see a rate hike at Thursday’s BoE monetary policy meeting.
The cross now trades below its 200-day SMA at $1.2434, which may act as minor resistance, and approaches its 3 ½ month low at $1.2379. A slip through it and the next lower June low at $1.2369 would target the May trough at $1.2309.
Minor resistance above the 200-day SMA remains to be seen at the 7 September low at $1.2446 and further up around the $1.2549 late August low and last Monday’s high.
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