The EURUSD and GBPUSD Forecast: Signs of a Recovery
Looking at the chart on the daily time frame, we see that the EURUSD pair has so far found support current at 1.17000. Our technical support is at 38.2% Fibonacci level at 1.16950, and for a more concrete signal to continue the bullish trend, we need a price increase above the 20-day moving average. Only then can we expect a return to the bullish trend. We can expect a further withdrawal of the EURUSD pair below 38.2% Fibonacci levels for the bearish scenario. After that, we are looking at 1.16000 for potential support, while we will look for more technical support if we go down to 1.15000 at 50.0% Fibonacci level.
GBPUSD chart analysis
Looking at the daily time frame chart, we see that the GBPUSD pair found current support at 1.36000. After the support, we climbed to the current 1.36820. This Monday started great for the pound, while the dollar, after confirming the previous high, the dollar started to make a certain pullback. For the potential bullish scenario, we need a further continuation towards 1.38000. There potential resistance awaits us because we encounter moving averages. The most important thing in this time frame is our 200-day moving average. If the GBPUSD pair manages to overcome that resistance zone, we can only expect further growth towards 1.40000. For the bearish scenario, we need a new negative consolidation that will continue to steer the GBPUSD pair back towards 1.36000 in order to test the support zone again.
Private sector growth in the UK weakened sharply in August, mainly due to staff shortages and supply chain problems, the results of the latest research conducted by IHS Markit and the Chartered Institute of Procurement & Supply showed on Monday.
The fast composite output index fell to a six-month low of 55.3 in August from 59.2 in July. The result was expected to fall to 58.4.
A weaker recovery was recorded in both the manufacturing and service sectors. The procurement manager index fell to 55.5 from 59.6 in July. The expected level was 59.0.
PMI in production fell to a five-month low of 60.1 from 60.4 in the previous month. The reading is projected to fall to 59.5.
The growth of new orders weakened only slightly in August, the research showed.
Inflationary pressures showed August’s easing, with input prices rising at the slowest pace in three months.
Duncan Brock, the group’s director at CIPS, said: “The abnormally large slowdown in overall activity in August offers a strong warning to the British economy that the accelerated growth rates we saw earlier this summer are not sustainable.”
“The big drop in composite PMI suggests that the economic recovery could slow down a little faster than we thought,” said Kieran Tompkins, an economist at Capital Economics. “This poses a negative risk to our forecast that the economy will return to pre-pandemic levels by October,” the economist added.
The eurozone’s private sector recorded one of the strongest growth in two decades in August, as further economic reopening spurred the expansion of service industries, the results of the latest IHS Markit survey showed on Monday.
The Flash Composite turnout index fell to 59.5 from a 15-year high of 60.2 in the previous month. The forecasts predict a slight drop to 59.7.
Still, reading above 50 indicates growth. The latest score coincided with June’s and saw the joint and second fastest expansion since 2006.
Get the latest economy news, trading news, and Forex news on Finance Brokerage. Check out our comprehensive trading education and list of best Forex brokers list here. If you are interested in following the latest news on the topic, please follow Finance Brokerage on Google News.