EUR and GBP Retreat from Key Levels

FXOpen -

Financial and currency markets are experiencing one shock after another. The steady decline in US inflation, a potential Fed rate cut, and the current US president’s exit from the election race have led to sharp fluctuations in almost all currency pairs. Last week:

  • The GBP/USD pair traded above the psychological level of 1.3000;
  • USD/JPY sellers pushed the price below 156.00;
  • The EUR/USD currency pair updated its May highs of the current year at 1.0920. Currently, we are observing corrective pullbacks from recent impulses. The news coming out this week will provide more clues about the development of current trends.

GBP/USD

Technical analysis of the GBP/USD pair indicates the possibility of a continued upward movement if the range of 1.2900-1.2880 remains as support. However, at the end of last week, a "bearish engulfing" pattern was formed on the daily timeframe, which, if fully realised, could lead to a test of 1.2860-1.2800. The following news could affect the pair’s pricing:

  • Today at 17:00 (GMT+3) - US existing home sales data for June;
  • Tomorrow at 11:30 (GMT+3) - UK services PMI release.

EUR/USD

Technical analysis of the EUR/USD pair indicates the likelihood of resuming an upward movement if the price continues to trade above 1.0870-1.0850. At the same time, the possibility of a deeper downward correction cannot be ruled out, as a "bearish tweezer" pattern has formed on the daily timeframe. If the price goes below 1.0870, the decline may continue towards 1.0820-1.0800. The following events could reinforce current trends:

  • Today at 10:00 (GMT+3) - speech by European Central Bank representative Philip Lane;
  • Today at 17:00 (GMT+3) - Eurozone consumer confidence index release;
  • Tomorrow at 11:00 (GMT+3) - Eurozone manufacturing PMI release for the current month.