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EURUSD and GBPUSD Forecast: Focus on the Recovery

Looking at the daily time frame chart, we see that the EURUSD pair is now at 23.6% Fibonacci level, and we are looking for support in the 20-day and 50-day moving averages. If the EURUSD pair finds support here, we return to the bullish trend, and for a stronger bullish signal, we need a break above the 38.2% Fibonacci level at 1.18940. For the bearish scenario, we need a further retreat below moving averages and 23.6% Fibonacci levels, with a target in the previous low at 1.16640, where we can expect potential support and an obstacle to a further bearish trend. EURUSD and GBPUSD focus on recovery

 

GBPUSD chart analysis

Looking at the chart on the daily time frame, we see that the dollar has an advantage over the pound even today, while we are still under pressure from moving averages from the top. Daily movement is in the range of 1.37500-1.38000. For the bearish scenario, we need to lower the price below 1.37500 and 38.2% Fibonacci levels; after that, we are looking for support at 1.36900 at 23.6% Fibonacci levels. For the bullish scenario, we need to climb above 61.8% Fibonacci levels to 1,38400 in order to try to overcome the previous high and continue on the bullish side.

EURUSD and GBPUSD focus on recovery

Market overview

World stocks moved away from record levels in the previous session, and European stocks fell this morning due to uncertainty about the pace of economic recovery. At the same time, the dollar reached one-week highs as investors reduced exposure to riskier assets.

The U.S. S&P futures fell 0.1% after the S&P 500 fell 0.34% on Tuesday.

The central bank’s flexible policies and optimism about reopening economies have led stocks to record highs. Still, concerns are growing about the impact of growing coronavirus infections due to the Delta variant.

Markets are also still assessing data from last week. This showed that the U.S. economy created the least jobs in seven months in August. So, they are wondering how the U.S. central bank will react.

Conclusion

The Fed will probably move forward with a plan to cut its major asset purchase program despite a slowdown in job growth, Federal Reserve Bank Chairman St. Paul said on Wednesday. Louis James Bullard.

“Everything is shrinking. We’re looking at each individual central bank – when’s the next one,” said Eddie Cheng, head of international multi-asset portfolio management at Wells Fargo Asset Management. However, he added: “The impact of the Delta variant is still going wild.”

MSCI’s global equity index fell 0.17% after seven consecutive days of growth.

European stocks fell to their lowest level in almost three weeks and fell 0.69%. The British FTSE 100 reached a two-week low and fell 0.56%.

“What we are likely to expect is a continuation, but a temporary slowdown in economic activity in one to three months, which probably began in August,” said Sebastien Gali, a senior macro strategist at Nordea Asset Management.

Fed officials John Williams and Robert Kaplan spoke later Wednesday.

In Europe, markets focus on whether the European Central Bank will reduce its bond repurchase program this week.

The dollar reached a one-week high against the currency index, recovering from recent five-week declines. It was trading at an index of 92.67, up 0.15%.

 

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