26 May chart overview for EURUSD and GBPUSD
EURUSD chart analysis
During the Asian session, the euro strengthened against the dollar. Yesterday, the notes from the last meeting of the Fed showed a slightly milder “hawkish” tone, which was reflected in a milder withdrawal of the American currency. An embargo on Russian oil imports could be introduced by the end of this month. The euro was slightly retreating below the 1.07000 level during the European session. Now, the euro is being exchanged for 1.06800 dollars, representing the strengthening of the common European currency by 0.03% since the beginning of trading tonight. Today afternoon, the second reading of U.S. GDP is expected for the first quarter. We need a new climb above the 1.07000 level for the bullish option. After that, the pair would try to threaten yesterday’s high at the 1.07500 level. If the pair manages to consolidate at the team level in the continuation, then we could expect the continuation until the next resistance at the 1.08000 level. We need a negative consolidation and a euro pullback below the 1.06500 level for the bearish option. After that, the pair could go down to the 1.06000 level, the place of the previous breakthrough of the bullish impulse. If this support does not withstand the pressure of selling the euro, the pair could drop to the next low at 1.05300, then 1.05000 psychological level and 1.04500 level, a larger support zone.
GBPUSD chart analysis
During the Asian session, the British pound strengthened against the dollar, but it took not too long because the pound began to weaken as we approached the European session. This morning’s maximum was 1.26130 level, after which we saw a descent to 1.25550 level. The pound quickly found support there and climbed to 1.26000 again. Now we need a break above 1.26200 in order for us to expect a continuation on the bullish side. Our first target is the 1.26400 level. The following potential targets above are 1.27000 and 1.27500 levels. We need a new pullback below the 1.25550 level for the bearish option. After that, we descend to the lower support line in the zone 1.25250 level. A break below the support line would increase bearish pressure, which, together with negative economic data from the day before and high inflation, could lower the pound to this year’s low zone around 1.22000 level.
Market overview
The escalation of inflation and the persistent tightness of the labor market is changing the trend of the expanding yield. According to economists from Westpac, GBPUSD remains vulnerable, but it is also likely to consolidate.
The combination of steadily higher inflation and lower cost of living relative to final demand has put the UK at the top of major economies at risk of stagflation.
The plan, which British Finance Minister Rishi Sunak will announce today, is expected to include a £ 10 billion support package to help grow energy bills. Inflation rose to its highest annual rate since 1982 last month, putting pressure on the government to do more to help those most in need.
