Pound and Euro Decline Ahead of Key Macroeconomic Data
The US labour market data released on Friday caused sharp fluctuations in major currency pairs. Following the release of average wage and employment data from the US:
- EUR/USD rose to 1.1140 before sharply dropping to 1.1070.
- GBP/USD buyers attempted to push the price to 1.3240, but by market close, they had lost some of their gains.
- EUR/JPY tested support at 158.00 but failed to hold below that level.
The markets reaction to the mixed labour report led to investors shifting out of riskier assets and into safe-haven currencies, with the US dollar being one of them.
EUR/USD
Technical analysis of EUR/USD suggests a deeper downside correction may develop, as the pair formed a bearish engulfing pattern after bouncing from 1.1140. Additionally, the previously formed harami pattern increases the likelihood of testing psychological support at 1.1000. If buyers manage to push the price back above 1.1100, the uptrend could resume towards 1.1200-1.1180. Key events in the coming sessions include:
- 09:00 (GMT+3) today: release of Germany's Harmonised Consumer Price Index.
- 12:00 (GMT+3) today: release of the EU economic forecasts.
- 12:25 (GMT+3) tomorrow: speech by ECB Governing Council member Elizabeth McCaul.
GBP/USD
GBP/USD buyers inability to hold above 1.3200 resulted in a sharp pullback from 1.3240 and the formation of a bearish engulfing pattern on the daily timeframe. Technical analysis indicates further downside towards 1.3000-1.2600, as long as the pair trades below 1.3100. A move back above 1.3100 could lead to a retest of recent highs at 1.3240-1.3200. Events that could influence GBP/USD pricing:
- 09:00 (GMT+3) today: UK unemployment rate for August.
- 09:00 (GMT+3) today: UK average wage growth (excluding bonuses) for July.
Read more: https://fxopen.com/blog/en/ru-pound-and-euro-decline-ahead-of-key-macroeconomic-data/
Text source: Forex Trading Blog
