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EURUSD and GBPUSD bullish consolidation

  • The euro has been in an uptrend since the start of the Asian session.
  • During the Asian session, the British pound appreciated against the dollar.
  • Consumer price inflation in Germany reached a record high in April.
  • Japan’s leading index rose in March.

EURUSD chart analysis

The euro has been in an uptrend since the start of the Asian session. The day started at the 1.05296 level; Over time, the pair started bullish consolidation and climbed to the 1.05620 level. The current exchange rate development of the euro against the dollar is 0.30% since the beginning of the trading day. Our first resistance is in the 1.05600-1.05800 zone. We need a break above this zone to try to challenge the 1.06000 level. Our first key target is the 1.06420 level.

In the opposite scenario, we need fresh bearish consolidation and EURUSD pullback to previous support at 1.05245. If the pair stays at this level longer, we can expect increased downside pressure and a possible break below. We are looking for lower support around the 1.05000 level. Potential support below lies at 1.04815, then 1.04693 this year’s low.

Diagram:

EURUSD chart analysis

GBPUSD chart analysis

During the Asian session, the British pound appreciated against the dollar. Forex traders’ impatience ahead of today’s inflation announcement is causing some of them to “bet” on the slowdown in US inflation, thereby weakening the dollar. The 10-year US Treasury yield rose 3% late last week, giving the dollar an additional boost. The mood in the financial markets is very bad and this also applies to the US dollar. The pound was exchanged for $1.23585, marking a 0.38% appreciation in the British currency since the start of tonight’s trading. Ahead of the US session, the latest US inflation figures are expected in April.

To continue the uptrend we need a break above 1.24000 level. After that we can expect continuation pairs of the following bullish targets 1.24500, 1.25000, 1.25750 and 1.26360. For the bearish option, we need a pullback below the 1.23000 level. After that we will challenge the 1.22595 level, this year’s lower low, which would lead to a possible break below and formation of a new minimum.

Diagram:

GBPUSD chart analysis

Market Overview

Rising inflation in Germany

Consumer price inflation in Germany reached a record high in April; Final Destatis data showed on Wednesday.

CPI inflation rose to 7.4% in April from 7.3% in March. Inflation hit its highest level in history since 1991, according to an estimate released on April 28.

Destatis named the development of energy prices as one of the main reasons for the record increase in overall prices. The above-average increase in food prices has also pushed up consumer prices. The statistics office said the effects of the war in Ukraine were becoming more and more visible.

Japan’s leading index

Japan’s leading index rose in March after falling the previous month, preliminary cabinet data showed on Wednesday.

The leading index, which measures future economic activity, rose to 101.0 in March from 100.1 in February.

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Callan Tansill

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