European Currencies Correct to Key Support Levels

The appreciation of European currencies observed over the past two months has stalled after testing key medium-term levels. The single European currency, having fallen just short of 1.0000, formed a bearish engulfing pattern and retreated below 1.0800. GBP/USD buyers failed to hold the price above 1.3000, and last week the pair was trading below 1.2900.

Several important macroeconomic indicators are set to be released in the upcoming trading sessions, which may provide insight into whether the current trends will persist.

EUR/USD

A reversal pattern on the daily timeframe from 18 March interrupted the pair’s nearly uninterrupted upward movement from the 1.0360 level.

Technical analysis of EUR/USD suggests a potential decline towards 1.0700–1.0680 if the pair continues to trade below 1.0820–1.0800. A break above 1.0860 could resume the upward movement towards the key psychological resistance level of 1.1000.

Key events that could influence EUR/USD pricing in the upcoming trading sessions:

• Today at 10:00 (GMT+2): Spain GDP
• Today at 11:00 (GMT+2): European Central Bank non-monetary policy meeting
• Today at 15:30 (GMT+2): US core durable goods orders
• Today at 18:30 (GMT+2): Atlanta Federal Reserve GDPNow indicator

GBP/USD

GBP/USD buyers failed to consolidate above the strategic 1.3000 level on the first attempt. A rejection at this mark led to a short-term dip below 1.2900, but a firm move lower and the development of a full-fledged downward correction have yet to materialise.

A retest of 1.3000 remains possible in the near future. A strong breakout above this level could push the pair towards the December highs of last year, around 1.3060.

If 1.2880 turns into resistance, a decline towards 1.2770–1.2750 may follow.

Key events that could influence GBP/USD pricing in the upcoming trading sessions:

• Today at 10:00 (GMT+2): UK Consumer Price Index (CPI)
• Today at 11:00 (GMT+2): UK Spring Budget Forecast
• Tomorrow at 11:30 (GMT+2): Speech by Swati Dhingra, member of the Bank of England’s Monetary Policy Committee
• Tomorrow at 13:00 (GMT+2): UK 7-year Treasury bond auction

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips (additional fees may apply). Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.