EUR/USD and GBP/USD extended their decline, revisiting recent extremes after last week’s corrective rebound. The recovery attempt was largely technical in nature and did not alter the broader structure of the move. Additional pressure on European currencies came from dollar strength following Wednesday’s release of the Federal Open Market Committee minutes, which signalled a cautious stance and offered no indication of imminent policy easing. This reinforced support for the US currency and triggered a fresh downward impulse in both EUR/USD and GBP/USD.

At present, the market’s focus has shifted to upcoming macroeconomic data from both Europe and the United States. These releases are likely to determine whether the current downward trend gathers further momentum or whether the pairs begin to establish medium-term support levels.

Overall, the euro and sterling remain under pressure after the recent correction faded and the dollar strengthened on the back of the minutes. Further direction will depend on incoming data: either the bearish trend will be confirmed, or the market will begin searching for more sustainable levels of stabilisation.

EUR/USD

As anticipated, EUR/USD buyers failed to overcome resistance in the 1.1900–1.1930 range. The unsuccessful test of this area last week reinforced the downward impulse and led to fresh moves towards recent lows near 1.1800. Technical analysis suggests a potential test of support in the 1.1650–1.1720 zone. The bearish scenario would be invalidated by a firm break and consolidation above 1.1800.

Key events for EUR/USD:

• Today at 10:30 (GMT+2): Germany’s Manufacturing PMI;
• Today at 15:30 (GMT+2): US Gross Domestic Product;
• Today at 15:30 (GMT+2): US Core PCE Price Index.

GBP/USD

A rejection from the key 1.3700 resistance level intensified downward pressure on GBP/USD. Sellers pushed the pair to fresh recent lows near 1.3500. Should UK data disappoint, a further decline towards 1.3320–1.3360 cannot be ruled out. A weakening of the bearish pressure would require either a decisive move back above 1.3500 or the formation of a reversal pattern on higher time frames.

Key events for GBP/USD:

• Today at 09:00 (GMT+2): UK Core Retail Sales Index;
• Today at 11:30 (GMT+2): UK Composite PMI;
• Today at 16:45 (GMT+2): Speech by FOMC member Bostic.

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