Pound and Euro Decline Ahead of Key Macroeconomic Data
FXOpen
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 market’s 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.
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.
Stay ahead of the market!
Subscribe now to our mailing list and receive the latest market news and insights delivered directly to your inbox.
Latest articles
Market Repricing of Risk as Gold Loses Safe-Haven Demand
Geopolitical tensions in the Middle East had remained the primary macro driver for the gold market over recent weeks; however, on 8 April the situation shifted sharply as the United States and Iran agreed to a temporary two-week ceasefire, including
Commodity Currencies on the Rise: Market Focus Shifts to US and Canadian Data
Commodity-linked currencies continue to strengthen, while the US dollar remains under pressure amid easing geopolitical tensions and a shift in investor preference towards riskier assets. Reports of a temporary ceasefire between the US and Iran have helped stabilise sentiment and