What Caused EURUSD To Retreat To 1.07000 and How?
- Yesterday we saw EURUSD retreat from 1.07950 to 1.07000 level.
- GBPUSD retreated today to this week’s low at 1.25400 level.
EURUSD chart analysis
Yesterday we saw EURUSD retreat from 1.07950 to 1.07000 level. The reason for this retreat is the increase in US inflation, which resulted in the strengthening of the dollar. The data showed that monthly inflation rose by 0.3%, while forecasts were for 0.2%. During the Asian trading session, the pair moved in the 1.07025-1.07200 range. With the beginning of the EU session, the euro’s weakness came, and we saw a drop to the 1.06950 level.
We remain under bearish pressure, and potential lower targets are 1.06900 and 1.06800. We need a positive consolidation and a return above the 1.07200 level for a bullish option. Then, we would have to hold above that if we plan to see a continued recovery. Potential higher targets are 1.07300 and 1.07400 levels.
GBPUSD chart analysis
GBPUSD retreated today to this week’s low at 1.25400 level. This morning’s data on the reduction of British inflation had a negative impact on the pound. The pair was very close to testing last week’s low at the 1.25184 level. For now, we are holding above the daily low and recovering slightly to the 1.25520 level. We need a continuation of the positive consolidation to try to recover and erase some of the previous decline.
Potential higher targets are 1.25600 and 1.25800 levels. We need a new test of the 1.25400 support level for a bearish option. A drop below would lead to the formation of a new daily low and thus extend the bearish pressure. Potential lower targets are 1.25200 and 1.25000 levels.
