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EURUSD and GBPUSD still are influenced by the strong dollar

by Carl Steward
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EURUSD and GBPUSD still are influenced by the strong dollar

EURUSD chart analysis

During Asian trade, the euro strengthened against the dollar. Yields on ten-year US Treasury bonds were withdrawn yesterday. The oversold euro finds support in its weakness. Currently, the euro is being exchanged for 1.13355 dollars, representing the strengthening of the common European currency by 0.21% since the beginning of trading tonight.

Bullish scenario:

  • We need a new positive consolidation that would start a new bullish trend.
  • We expect to continue to gain support in the lower trend line.
  • The first potential resistance is at 1.14000, then at 1.14800 previous high.
  • At 1.15000, we encounter a resistance zone from October, and additional resistance is our upper trend line.
  • The break above opens up space for us towards 1.17000 next resistance.

Bearish scenario:

  • We need continued negative consolidation below the bottom line of support.
  • Our current support is at 1.13000, and if the pair breaks below, then we go down to the previous low at 1.12000.


GBPUSD chart analysis

After climbing to 1.37500 and touching the MA200 daily moving average, the GBPUSD pair makes a sharp turn and enters the bearish trend. We are now at 1,35580 and not seen on the chart near this pullback. The MA20 is the moving average we are currently testing.

Bullish scenario:

  • We need a new positive consolidation that would stop the current bearish momentum.
  • We need to climb above 1.36000 again, in order to recover at least a little.
  • Our first target is the previous high at 1.37500, then the zone at 1.38000.

Bearish scenario:

  • We need to continue this negative consolidation, which directs us further towards 1.35000.
  • Below is the next support zone at 1.34000, where we have additional support in the MA50 moving average.
  • Depending on the bearish pressure, our large main zone is at 1.32000.


Market overview

British news

Retail sales in the UK fell more than expected in December as the Omicron epidemic reduced Christmas sales, data from the Office for National Statistics showed on Friday.

Retail sales fell 3.7 percent on a monthly basis in December, reversing a 1 percent rise a month ago. This is the biggest drop since January 2021. The forecast was a 0.6 percent drop in sales.

Also, the volume of sales without fuel decreased by 3.6 percent after a growth of 0.7 percent in November. This was also much higher than the economists’ forecast of -0.5 percent.

Retail sales were 2.6 percent higher than before the February 2020 coronavirus.

After strong sales in November, sales in non-food stores fell sharply by 7.1 percent, and sales in food stores by 1.0 percent compared to the previous year.

Car fuel sales fell 4.7 percent, as increased work at home reduced travel in December.

With encouraging signs that the Omicron epidemic has gone through the worst and the limitations of “Plan B,” which should be lifted next week, retail could make up for part of this decline in January and probably until February and March.

European news

European Central Bank policymakers have maintained that the current jump in inflation is driven by temporary factors, that are likely to ease this year. Still, some have expressed concern that inflation could remain high, according to the minutes of the last policy session on Thursday.

Policymakers have also expressed concern about any premature cuts in monetary incentives and asset purchases.

Members broadly agreed that significant monetary policy support is still needed to stabilize inflation at the medium-term level of inflation set by the Board of Governors, the minutes said.

“Overall, the minutes of the ECB’s December meeting illustrate a more realistic debate on several inflation scenarios, supporting the decision to reduce asset purchases in 2022,” said ING economist Carsten Brzeski.

The post EURUSD and GBPUSD still are influenced by the strong dollar appeared first on forexinsider24.com.

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