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The euro is starting to gain momentum ahead of the ECB’s event!

Will EUR/GBP extend its uptrend despite breaking a key support level?

Before moving on, ICYMI, yesterday’s watchlist looked for a potential channel breakdown on AUD/USD after the RBA announced a larger-than-expected rate hike. Be sure to check out if it’s still a valid play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

Canada’s IVEY PMI expanded at a faster rate from April (66.3) to May (72.0)

Yellen: the US dealing with “unacceptable” inflation levels, expects inflation to remain high

Global dairy prices rise for the first time in three months, up 1.5% after dipping 2.9% two weeks ago

Japan final Q1 GDP reflects smaller contraction (-0.5% y/y) than initially reported (-1.0% y/y)

Switzerland’s unemployment rate dropped from 2.3% to 2.1% in May

Halifax: U.K. annual house prices slow for 3rd month in a row in May

France’s trade deficit narrows from a 12.7B EUR record high to 12.2B EUR in April

European stocks slip; markets raise ECB rate hike bets

Upcoming Potential Catalysts on the Forex Economic Calendar:

Revised Eurozone GDP at 9:00 am GMT
U.S. crude oil inventories at 2:30 pm GMT
U.K. RICS house price balance at 11:01 pm GMT
China’s trade balance during the Asian session (June 9)

Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️

What to Watch: EUR/GBP

EUR/GBP 1-hour Forex Chart

EUR/GBP 1-hour Forex Chart

There won’t be a ton of top-tier reports scheduled from the U.S. today, which means traders could once again take cues from overall risk sentiment.

EUR has a bit more going for it with a final Eurozone GDP reading today and then the latest European Central Bank (ECB) policy decisions tomorrow.

If you missed my Weekly Trading Guide, then I should tell you that ECB may not raise its interest rates but markets are expecting President Lagarde and her team to hint at rate hikes in the succeeding months.

Some are even pricing in a 25bp hike in July AND a 50bp interest rate hike in September!

Hawkish ECB expectations are pushing EUR higher right now, with EUR/GBP climbing from its sub-.8500 levels to retest the .8540 zone.

As you can see, .8540 is not far from the broken ascending channel support and the 100 and 200 SMAs on the 1-hour time frame.

Can EUR/GBP maintain its bullish momentum?

Sustained trading above the support levels that we’ve marked could mean the continuation of an uptrend that started in mid-May.

EUR/GBP could jump back up.8600 if not make new monthly highs.

A rejection at .8540 – .8550, on the other hand, could drag EUR back down to June’s lows.

What do you think? Which way will EUR/GBP go today?