European Currencies Strengthen Following Donald Trump's Inauguration
The start of this trading week was marked by a sharp pullback in the US dollar. According to reports from The Wall Street Journal, the newly inaugurated US President, Donald Trump, does not intend to impose tariffs immediately after taking office. This news supported the EUR/USD pair in retesting the critical 1.0440 level, helped GBP/USD buyers push the price above 1.2300, and saw USD/JPY temporarily dip below 155.00.
GBP/USD
Technical analysis of the GBP/USD pair indicates the potential for a continued upward correction, as the daily timeframe still reflects the relevance of the "hammer" pattern from 13 January. If the price rises above the 1.23401.2300 range, further gains towards 1.24801.2400 are possible.
A resumption of the downward trend may occur if the price falls below yesterday's low of 1.2160. Upcoming macroeconomic indicators will play a crucial role in determining GBP/USD's direction. Key events to watch:
- Today at 10:00 (GMT+2): UK employment change;
- Today at 10:00 (GMT+2): UK average earnings (excluding bonuses);
- Tomorrow at 10:00 (GMT+2): UK public sector net cash requirement.
EUR/USD
The EUR/USD pair is testing the key 1.04401.0400 range for the fourth time this month. If buyers break through this resistance, the corrective rally could extend towards 1.05701.0500. Conversely, if the price drops below 1.03501.0300, a retest of the recent low at 1.0180 may follow.
On the daily timeframe, the EUR/USD chart shows the formation of a "V-shaped reversal" pattern. If this pattern is confirmed, it may signal the start of a deeper upward correction.
The following events are likely to influence EUR/USD price movements in the coming trading sessions:
- Today at 13:00 (GMT+2): Germany ZEW Economic Sentiment Index;
- Today at 14:00 (GMT+2): Bundesbank monthly report;
- Tomorrow at 18:15 (GMT+2): Speech by ECB President Christine Lagarde.
Read more: https://fxopen.com/blog/en/ru-european-currencies-strengthen-following-donald-trumps-inauguration/
Text source: Forex Trading Blog
