EUR/USD, EUR/GBP and GBP/USD rise amid lower German inflation and UK unemployment
Outlook on EUR/USD, EUR/GBP and GBP/USD ahead of Fed and ECB central bank meetings.
EUR/USD hits near three-week high
EUR/USD is trading in near three-week highs as German annual inflation was confirmed at a 14-month low of 6.1% in May, down from 7.2% in April.
Monetary policy meetings by the likes of the US Federal Reserve (Fed) on Wednesday and the European Central Bank (ECB) on Thursday may lead to an increase in volatility in the days ahead.
Potential upside targets are the $1.0804 mid-February high and the $1.0832 10 April low while Monday’s low at $1.0734 underpins. If $1.0734 were to unexpectedly give way, the late May low at $1.0636 would be back in sight.
EUR/GBP recovers from its ten-month low
EUR/GBP’s slide to levels last traded in August of last year, to Monday’s £0.8542 low, has been followed by a bullish engulfing pattern on the daily candlestick chart on Monday which points to an interim bottom having been formed.
As German inflation declined as expected and the UK unemployment rate dropped to 3.8% in April, versus an expected 4.0%, and compared to a previous 3.9% reading, EUR/GBP approached its May-to-June downtrend line at £0.8616 which capped.
For a lasting bullish reversal to become possible, not only the downtrend line would need to be breached but also the 5 June high at £0.8636 be exceeded. Slips should find support around the £0.8568 early June low.
GBP/USD continues to rally post UK unemployment data
GBP/USD is seen heading towards its $1.2599 Monday high as UK unemployment came in lower than expected.
Above $1.2599 lurks the May peak at $1.2679. This high will remain in focus while Monday’s low at $1.2488 holds on a daily chart closing basis. En route lie the 9 and 11 May highs at $1.264.
Potential support below $1.2488 is seen along the 55-day simple moving average (SMA) at $1.2466.
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