June 7, 2023

EURUSD, GBPUSD calm at the beginning of the year

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EURUSD, GBPUSD calm at the beginning of the year

EURUSD chart analysis

During the Asian session, the euro weakened further against the dollar after a sharp drop from yesterday. Long-term yields on US government bonds are growing strongly again since yesterday, so the US currency is in a big rush against all major currencies. Spain and France joined Italy due to the worrying number of newly infected people. The euro is currently being exchanged for 1.12990 dollars, which is a weakening of the common European currency by 0.02% since the beginning of trading tonight.

Bullish scenario:

  • We need better positive consolidation and growth of EURSUD above the MA20 and MA50 moving average.
  • We are still far from 1.15000, and we hope to see a pair up to 1.14000 on the MA200 moving average.
  • At 1.15000, we have the falling trend line from May last year, which can be a big obstacle for us to start a stronger bullish trend.
  • If the pair makes a break above the line, our target is the previous high zone at 1.17000, the last time we were there was in October last year.

Bearish scenario:

  • We need to continue this negative consolidation, and with the pressure of MA20 and MA50, we continue towards 1.120000, where we will test the previous low from 2021.
  • Break EURUSD below will form a new lower low on the chart, and a larger support zone awaits us around 1.10000.
  • A fall below 1,100,000 could drop us into the pre-pandemic zone of 2020 in the zone around 1.06000-1.08000.

GBPUSD chart analysis

During the Asian session, the British pound strengthened against the dollar after yesterday’s withdrawal. Currently, the pound is exchanged for 1.35070 dollars, representing a strengthening of the British currency by 0.23% since the beginning of trading tonight. Long-term yields on US government bonds growing strongly again since yesterday. The UK reported 130,000 new coronavirus infections yesterday. Post-Brexit tensions over fishing with the EU have had a positive outcome for 2022. Still, the status of Northern Ireland remains a stumbling block for relations between European countries and the UK.

Bullish scenario:

  • Pair is in a bullish trend after finding support at 1.32000.
  • We got support in the MA20 and MA50 moving averages, and now we are looking at how the pair will behave when approaching the upper trend line.
  • This trend line was formed in May last year, and for now, it is an obstacle to the bullish trend. The line has resisted in previous GBPUSD attempts to make a break above.
  • Our next target is the MA200 moving average in the 1.37500-1.38000 zone if that happens.

Bearish scenario:

  • We need new negative consolidation and pulling the pair to lower levels.
  • Our first support was last year’s low zone at 1.32000.
  • If bearish pressure continues, we are likely to see a further decline in GBPUSD towards 1,300,000 psychological support levels.
  • Looking at the chart, our stronger support is at 1.27000, the place of movement from October 2020.


Market overview

German news

Unemployment in Germany fell more than expected at the end of the year, data from the Federal Labor Agency showed this morning. The number of unemployed declined by 23,000 in December, more than the economists’ forecast of -15,000, while unemployment fell by 34,000 in November.

The unemployment rate drop slightly to 5.2 percent in December from 5.3 percent in the previous month, and the forecast was for the rate to remain unchanged at 5.3 percent.

In the labor market, the recovery has continued in the last few months, despite the uncertainty arising from the pandemic situation.

British news

Prices in the UK were growing faster than expected in December, data from the British Retail Consortium or BRC revealed on Tuesday.

In-store prices rose 0.8 percent year-on-year in December, after increasing 0.3 percent in November, the first increase in two and a half years.

Food prices rose 2.4 percent, driven by a sharp rise in fresh food prices. Meanwhile, non-food prices fell 0.2 percent.

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