EURUSD and GBPUSD: The situation is not going well
- During the Asian trading session, the euro weakened against the dollar.
- During Asian trade, the British pound weakened against the dollar.
- Prime Minister Johnson and BoE expectations.
EURUSD chart analysis
During the Asian trading session, the euro weakened against the dollar. Accelerating yields on U.S. government bonds influenced the price of gold to pull back yesterday. The ten-year bond again yields more than 3% giving strength to the U.S. currency. On the one hand, the euro is under pressure from officials’ statements that the situation in Europe is not going well due to the sanctions against Russia. On the other hand, the prospect of increasing the interest rate of the European Central Bank due to rising price inflation keeps the euro in the focus of currency traders. During the European trading session, the euro recouped losses incurred in the previous session. The euro is now being exchanged for 1.07100 dollars. That represents the strengthening of the common European currency by 0.09% since the beginning of trading tonight. A regular meeting of the ECB is to be held tomorrow. If the European bullish trend continues, the pair could climb to 1.07500 levels. Otherwise, if a new negative consolidation occurs, we will see a drop below the 1.07000 level and then a potential visit to the previous support zone around 1.06500.
GBPUSD chart analysis
During Asian trade, the British pound weakened against the dollar. Yesterday morning, the final data on the state of the services sector in the UK in May were much better than expected, showing 53.4 points instead of the expected 51.8. Boris Johnson survived the vote in the UK Parliament. The difference between pros and cons was relatively small. The British economy is still not on the right track, and inflation is extremely high, which can continue to put pressure on the British pound. The pound is currently exchanged for 1.25365 dollars, which is weakening the British currency by 0.42% since the beginning of trading last night. The pair is getting closer to the 1.25000 level, and we could test it again soon. If there were a break in the pound below, then space would open up to the 1,245,000 lower support zone. For the bullish option, we need a break above the 1.25500 level. Then, we quickly encounter the next resistance in the zone around the 1.25500 level. Additional resistance at that level is in the MA200 moving average. Above, we should be testing yesterday’s higher high at the 1.26000 level.
The eurozone economy expanded faster than expected in the first quarter thanks to a positive contribution from net trade, revised Eurostat data showed on Wednesday. Gross domestic product increased by 0.6% compared to the fourth quarter when the economy advanced by 0.2%. Economic growth improved to 5.4% from 4.7% on an annualized basis. EU27 GDP grew by 0.7% compared to the previous quarter, instead of 0.4%.
Prime Minister Johnson and BoE expectations
It can be assumed that Prime Minister Johnson will remain under fire from critics. However, the foreign exchange market is currently focusing on other issues. Economists at Comercbank expect sterling to remain under pressure as the Bank of England (BoE) disappoints markets next week. “The prime minister will probably continue to provoke negative headlines. Short-term reactions to the foreign exchange market are possible. Still, mostly political developments are likely to stay away from monetary policy, which is the main driver of sterling exchange rates.
The post EURUSD and GBPUSD: The Situation is not Going Well appeared first on forexinsider24.com.