Euro and Pound Strengthen to Strategic Levels
The chaos brought by Donald Trump to the US economy, introducing tariffs on China, Canada, and Mexico, has contributed to the strengthening of the euro, pound, and Swiss franc. The situation remained unchanged even after the release of US inflation data yesterday. According to the published figures, the core consumer price index declined more than analysts had forecast (2.8% versus 2.9%). In the long run, this may lead to an earlier Fed rate cut and a continued downward movement in the dollar.
EUR/USD
The euro has been strengthening for more than two consecutive weeks and is currently trading near last years October highs at 1.09501.0920. With the right news impulse, the price may break yesterdays highs and test the psychological resistance level at 1.1000.
Yesterday, a bearish harami pattern formed on the daily timeframe. If confirmed, EUR/USD may start a downward correction towards 1.08301.0760.
In the upcoming trading sessions, the following events may influence EUR/USD pricing:
- Today at 12:50 (GMT+2): Speech by European Central Bank Vice President Luis de Guindos.
- Today at 13:00 (GMT+2): Eurozone industrial production data.
- Today at 20:00 (GMT+2): Speech by Burkhard Balz from the Bundesbank.
- Tomorrow at 10:00 (GMT+2): Germanys Consumer Price Index (CPI).
GBP/USD
GBP/USD buyers managed to break out of a week-long flat movement between 1.29401.2870. The price has consolidated above the upper boundary of this range and may test a key resistance level at 1.3000. If the current levels turn into support, the uptrend may continue towards 1.31201.3050. A reversal of the bullish scenario is possible if the price drops below 1.2870.
By the end of the current trading week, the following events may affect GBP/USD pricing:
- Today at 15:30 (GMT+2): US initial jobless claims.
- Today at 15:30 (GMT+2): US Producer Price Index (PPI) (m/m).
- Tomorrow at 10:00 (GMT+2): UK Gross Domestic Product (GDP).
- Tomorrow at 10:00 (GMT+2): UK manufacturing production data.
Read more: https://fxopen.com/blog/en/ru-euro-and-pound-strengthen-to-strategic-levels/
Text source: Forex Trading Blog
