EURUSD and GBPUSD: New recovery
- During the Asian trading session, the euro was in retreat from 1.04500 to 1.04000.
- Late last night, yesterday’s attempt to recover the pound ended, and we stopped at the 1.22000 level.
- The Swiss National Bank unexpectedly raised its key interest rate on Thursday to cope with inflationary pressures.
EURUSD chart analysis
During the Asian trading session, the euro was in retreat from 1.04500 to 1.04000. We found support again at the 1.04000 level, and the euro started a new recovery. The euro is currently trading at 1.04150, down 0.29% from the dollar since trading began last night. There is still more pressure on the support zone, and a little will be enough for us for the pair to break below and form a new lower low. Potential bearish targets are 1.03500 and 1.03000 levels. We need a positive consolidation and a return above the 1.04500 level for the bullish option. After that, the euro could try to threaten the 1.05000 level. We tried it yesterday but without success. Break above the 1.05000 resistance zone should give the wind in the back of the euro to continue with the recovery to the 1.06000 level and MA200 moving average.
GBPUSD chart analysis
Late last night, yesterday’s attempt to recover the pound ended, and we stopped at the 1.22000 level. During the Asian trading session, the pair started the bearish trend at 1.22000, and we found support at the 1.20500 level. The pound is trading in that range, and the current price is 1.21330. We can say that the pair have not formed a new lower low so far and that we could see a continuation of the recovery above the 1.22000 level. Above potential bullish targets are 1.22500, 1.23000 and 1.23500, where we come across the MA200 moving average. For the bearish option, we need negative consolidation and the formation of a new lower low below the 1.20500 level. The pair would then apply pressure to the 1.20000 level. The break pound below would re-test this year’s low at 1.19500. Potential lower targets are 1.19000, 1.18500 and 1.18000 levels.
Swiss Central Bank Raises Key Rate
The Swiss National Bank unexpectedly raised its key interest rate on Thursday to cope with inflationary pressures.
The bank raised the reference rate and interest rate on demand deposits with the SNB by half a percentage point to -0.25% from -0.75%.
“It cannot be ruled out that a further increase in the SNB’s reference rate will be necessary in the foreseeable future in order to stabilize inflation in a range that is in line with price stability in the medium term,” the bank said in a statement.
The bank said it was ready to be active in the foreign exchange market as needed. The SNB has increased its inflation forecast, citing global factors. The inflation projection for this year was raised to 2.8% from 2.1%.
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