European Currencies Testing Key Levels: Contributing Factors
In recent trading sessions, a significant amount of crucial macroeconomic data has been released from the US, Europe, and the UK:
- Wednesday: Consumer Price Index (CPI) in the UK (the figure came in higher than experts' forecast at 2.3% versus 2.1%)
- Wednesday: Publication of the minutes from the latest Federal Reserve meeting
- Thursday: US Manufacturing PMI (the figure exceeded experts' forecast at 50.9 versus 50.0)
This rich mix of data contributed to the USD/JPY pair testing 157.00, EUR/USD sellers attempting to break key support at 1.0800, and the GBP/USD pair halting its recent strengthening and returning to 1.2700.
EUR/USD
Technical analysis of the EUR/USD pair indicates the development of a bearish dark cloud cover pattern on the daily timeframe, formed on May 16. If the pair's sellers manage to break the support at 1.0800, the downward movement of the pair could extend towards 1.0730-1.0710. A resumption of the upward movement can be expected once the price moves above 1.0900. Today, several macroeconomic indicators are due for release, which could either reinforce the current trend or lead to the formation of reversal patterns:
- Today at 09:00 (GMT+3:00) Germany's Q1 GDP
- Today at 13:00 (GMT+3:00) Eurogroup Meeting
GBP/USD
Buyers of the British currency have confidently held the price above the key level of 1.2700 over the past few weeks. The higher-than-expected CPI allowed the pair to strengthen to 1.2760, but pound buyers failed to develop a full-fledged upward trend, and yesterday the price fell back to 1.2700.
Technical analysis of the GBP/USD pair indicates the possibility of a downward movement, as a bearish hammer pattern has formed on the daily timeframe. If the 1.2700 mark turns into resistance, the pair could fall to 1.2560-1.2520. The downward scenario can be invalidated if the price rises above 1.2760. The following events could impact the pair's price formation:
- Today at 09:00 (GMT+3:00) UK Core Retail Sales for April
- Today at 15:30 (GMT+3:00) US Core Durable Goods Orders
Read more: https://fxopen.com/blog/en/ru-european-currencies-testing-key-levels-contributing-factors/
Text source: Forex Trading Blog
