EUR/GBP is approaching the resistance of a descending channel.
Can the pair extend its downtrend?
Before moving on, ICYMI, yesterday’s watchlist looked at a Head and Shoulders pattern on AUD/JPY after Australia missed some key economic data. 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:
US jobless claims unexpectedly dip for first time in three weeks
US existing home sales fall a sixth month to over two-year low of 4.81M in July
Fed’s George says pace, endpoint of rate hikes still matter of debate
Turkey’s central bank shocked with a 100bps rate cut to 13.00% despite soaring inflationNZ posts 1.1B NZD trade deficit (vs. 0.5B surplus expected) as imports outpace exports in July
UK consumer confidence hits record low of -44 in August amid ‘acute’ cost-of-living concerns
UK public borrowing at 4.94B GBP in July, more than 2.8B GBP expected as PM contenders promise more help
UK retail up by 0.3%, gets boost from online shopping in July
Japan inflation rate at 2.4% y/y, the highest in near 8 years
German annual producer prices climb 37.2%, highest increase on record
Asia stocks in limbo as dollar takes the lead
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone’s current account at 8:00 am GMT
Canada’s retail sales numbers at 12:30 pm GMT
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 4-hour Forex Chart
News of Greece exiting its post-bailout monitoring program helped improve demand for the euro today. Meanwhile, the U.K. is facing strikes from transportation workers and a record-low consumer confidence.
EUR-buying has bumped EUR/GBP above the 4-hour chart’s 200 SMA and now the pair is heading for the trend line resistance at the top of a descending channel that’s been around since mid-June.
Will the trend line hold as resistance? Or will we see an upside breakout?I’m not seeing tons of top-tier economic reports scheduled today so traders could focus on overall risk-taking.
Extended GBP-selling might push EUR/GBP to .8500 before the pair sees sustained selling pressure.
The .8450 and .8415 inflection points look good as targets if EUR/GBP gets rejected and sees bearish momentum from its channel resistance.
If this week’s trends cause an upside breakout for EUR/GBP, though, then bulls can target previous areas of interest near .8550 and .8600.
