EURUSD and GBPUSD unstable; Chart overview
- During the Asian trading session, the euro confirmed yesterday’s weak against the dollar.
- During the Asian trading session, the British pound consolidated somewhat against the dollar after yesterday’s plunge.
- Growth in UK construction sector activity weakened to a nine-month low in June as an uncertain economic outlook weighed on demand, S&P Global survey results showed on Wednesday.
EURUSD chart analysis
During the Asian trading session, the euro confirmed yesterday’s weak against the dollar. For the first time since 1991, Germany’s foreign trade balance fell into deficit. ECB officials announced on Monday a small increase in the benchmark interest rate of the ECB. The euro is trading at $1.02140, which represents a strengthening of the common European currency by 0.50% since the start of trading last night. Notes from the US Federal Reserve’s latest meeting are expected tonight. To continue the bearish option, we need further negative consolidation and a break below 1.02000, the next support level. Potential lower support targets are 1.01500 and 1.01000 levels. For a bullish option, we need a new positive consolidation and a return above the 1.02500 level. After that, our next target is the 1.03000 level. If the euro manages to consolidate above that level, we could expect a continued recovery of this pair.
GBPUSD chart analysis
During the Asian trading session, the British pound consolidated somewhat against the dollar after yesterday’s plunge. Post-Brexit disagreements with the EU over the status of Northern Ireland, stronger US Treasury yields undermining, and domestic political instability is weighing on the pound. The pound was trading at 1.19470, representing a 0.05% increase in the British currency since the start of trading last night. Notes from the US Federal Reserve’s latest meeting are expected tonight. We need a better positive consolidation and a return above the 1.20000 level for a bullish option. Additional potential support for us is the MA50 moving average. After that, we could expect further recovery, and potential targets are 1.20500 and 1.21000 levels. We need a continuation of the negative consolidation and a break below the 1.19000 level for a bearish option. Potential lower targets are 1.18500 and 1.18000 levels.
Market overview
Growth in UK construction sector activity weakened to a nine-month low in June as an uncertain economic outlook weighed on demand, S&P Global survey results showed on Wednesday.
The leading construction managers’ index for construction fell to 52.6 in June from 56.4 in May. The expected result was 55.0. A gloomy business outlook and deteriorating consumer demand due to the cost-of-living crisis combined to dampen construction growth in June, said Tim Moore, the chief economist at S&P Global Market Intelligence.
Efforts to increase capacity in response to higher overall workloads contributed to another strong increase in headcount. Firms reported a lack of candidates to fill vacant positions, despite offers of higher wages.
Companies recorded an increase in purchase prices in June, mainly due to the rise in energy, fuel, and transport costs.
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