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EUR/USD and GBP/USD depreciate while EUR/GBP recovers ahead of Friday’s UK March consumer confidence

EUR/USD continues to slide, GBP/USD topped out and EUR/GBP bounces off support amid rising oil prices which stoke inflationary fears.

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EUR/USD remains under pressure amid rising oil prices and inflationary fears

EUR/USD continues to trade below its two-month downtrend line at $1.1065 as surging oil prices provoke renewed fears of rising inflation and larger than previously expected rate hikes in the US.

The mid-March $1.0901 low thus remains in focus, a fall through which would lead to the $1.0806 early-March low being back on the cards. While the cross remains below last week’s high at $1.1137, this year’s downtrend remains intact.

EUR/USD chart Source: IT-Finance.com
EUR/USD chart Source: IT-Finance.com

EUR/GBP bounces off support ahead of Friday’s UK March Gfk consumer confidence

EUR/GBP drop through the 55-day simple moving average (SMA) and March 11 low at £0.8361 has taken it to the £0.8305 to £0.8286 support zone which held ahead of tomorrow’s UK March Gfk consumer confidence which is expected to come in at -30 compared to -26 a month ago.

While the January and February lows at £0.8305 to £0.8286 underpin, a bounce back towards the 55-day SMA at £0.836 is likely to ensue. Further, minor resistance lies at the 17 March low at £0.8368 and also at the £0.8408 25 February high.

EUR/GBP chart Source: IT-Finance.com
EUR/GBP chart Source: IT-Finance.com

Recent advance in GBP/USD is taking a breather

GBP/USD’s recovery rally from its 1 ¼ year low at $1.3001 ran out of steam at yesterday’s $1.3298 high as the war in Ukraine enters its second month.
The 22 March low at $1.3121 is back in the picture, since a drop through the December low at $1.3162 has occurred. Slightly further down, potential support can be seen at the 8 March low at $1.3083.

Only a fall through the mid-March low at $1.3001 would put the $1.2855 to $1.2813 June 2020 high and November 2020 low on the map. Resistance above the 17 March high at $1.3211 comes in at yesterday’s $1.3298 high.

GBP/USD chart Source: IT-Finance.com
GBP/USD chart Source: IT-Finance.com

This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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