EUR/USD, EUR/GBP and GBP/USD outlook ahead major central bank meetings
Outlook on EUR/USD, EUR/GBP and GBP/USD ahead of US inflation and Fed, ECB and BoE rate decisions.
EUR/USD muted ahead of US inflation data release
EUR/USD continues to range trade in low volatility ahead of Tuesday’s US Consumer Price Index (CPI) release for November which is forecast to come in at 3.1% versus 3.2% previously and at 4% for core inflation.
While last week’s low at $1.0724 underpins, Friday’s high at $1.08 is likely to be exceeded with Thursday’s high and the 200-day simple moving average (SMA) at $1.0817 to $1.0826 then being eyed. Further up the 22 November low at $1.0853 may also act as resistance, were it to be reached at all.
A fall through $1.0724 would probably put the 55-day SMA and late-October high at $1.0699 to $1.0695 on the plate, though.
EUR/GBP sideways trades above this week’s £0.8550 low
EUR/GBP's drastic decline from its six-month high at £0.8766, amid the European Central Bank's (ECB) less hawkish stance than that of the Bank of England (BoE), has so far taken it to a three-month low at £0.855.
Further sideways trading in low volatility is expected to be witnessed over the coming days, with Tuesday’s lower-than-forecast wage growth not making a dent. Only a rise above last week’s high at £0.8588 could lead to the mid-October low at £0.8617 being revisited. Together with the £0.865 early-November low it is expected to act as resistance, though, if reached at all that is.
Failure at £0.855 would put the July and August lows at £0.8504 to £0.8493 back in sight.
GBP/USD range trades ahead of US CPI reading
GBP/USD’s slip from last week’s near three-month high at $1.2733, on a strengthening US dollar amid solid US Non-Farm Payrolls, took it close to the 200-day SMA at $1.2493 which continues to underpin.
While it holds, minor resistance around the end of November $1.2604 low may be reached ahead of Tuesday’s US inflation data release.
Further minor resistance can be found around last Tuesday’s $1.2651 high.
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