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EUR/USD and GBP/USD depreciate while EUR/GBP recovers ahead of Friday’s UK March consumer confidence



EUR/USD continues to slide, GBP/USD topped out and EUR/GBP bounces off support amid rising oil prices which stoke inflationary fears.


EUR/USD remains under pressure amid rising oil prices and inflationary fears

EUR/USD continues to trade below its two-month downtrend line at $1.1065 as surging oil prices provoke renewed fears of rising inflation and larger than previously expected rate hikes in the US.

The mid-March $1.0901 low thus remains in focus, a fall through which would lead to the $1.0806 early-March low being back on the cards. While the cross remains below last week’s high at $1.1137, this year’s downtrend remains intact.

EUR/USD chart
Source: IT-Finance.com

EUR/GBP bounces off support ahead of Friday’s UK March Gfk consumer confidence

EUR/GBP drop through the 55-day simple moving average (SMA) and March 11 low at £0.8361 has taken it to the £0.8305 to £0.8286 support zone which held ahead of tomorrow’s UK March Gfk consumer confidence which is expected to come in at -30 compared to -26 a month ago.

While the January and February lows at £0.8305 to £0.8286 underpin, a bounce back towards the 55-day SMA at £0.836 is likely to ensue. Further, minor resistance lies at the 17 March low at £0.8368 and also at the £0.8408 25 February high.

EUR/GBP chart
Source: IT-Finance.com

Recent advance in GBP/USD is taking a breather

GBP/USD’s recovery rally from its 1 ¼ year low at $1.3001 ran out of steam at yesterday’s $1.3298 high as the war in Ukraine enters its second month.
The 22 March low at $1.3121 is back in the picture, since a drop through the December low at $1.3162 has occurred. Slightly further down, potential support can be seen at the 8 March low at $1.3083.

Only a fall through the mid-March low at $1.3001 would put the $1.2855 to $1.2813 June 2020 high and November 2020 low on the map. Resistance above the 17 March high at $1.3211 comes in at yesterday’s $1.3298 high.

GBP/USD chart
Source: IT-Finance.com
IG Analyst
24 March 2022


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    • Post in US Market news
      US Consumer price index YoY and MoM coming out at 12:30 UK time as well as US CPI index Food and Energy MoM and YoY. The US fed reserve have been taking measures to tame inflation but these results may impact markets so keep an eye out.
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      Crude oil prices are stagnant, disregarding inventory data and supply woes
      The anticipation of US CPI has seen markets somewhat calm today
      If CPI creates a storm, will a US Dollar move impact WTI prices?
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    • Swiss Franc Firming Against US Dollar and Euro. Will Momentum Take CHF Higher?
      EUR/CHF made a 7.5-year low at the end of last month at 0.9699, moving below the previous low of 0.9804.

      Since breaking lower, the price has not managed to reclaim 0.9804 and it may continue to offer resistance. The 21-day Simple Moving Averages (SMA)is currently at that level, potentially adding resistance.

      Further up, the recent peak of 0.9957 might offer resistance ahead of the break point at 0.9973.

      In the last session, the price has crossed below the 10-day SMA and remains below the 21-, 55-, 100- and 200-day SMAs.

      A bearish triple moving average (TMA) formation requires the price to be below the short term SMA, the latter to be below the medium term SMA and the medium term SMA to be below the long term SMA. All SMAs also need to have a negative gradient.

      Looking at EUR/CHF, the criteria for a bearish TMA has been met and may indicate that bearish momentum could evolve further.

      Support might be at the recent low of 0.9699 or further down at the 161.8% Fibonacci Extension of 0.9638.


      Chart created in TradingView 


      USD/CHF has bounced off low made at the start of this month at 0.9470 to trade in a wide range of 0.9545 – 0.9650. These levels might provide support and resistance respectively.

      While the price is below all short-, medium- and long-term Simple Moving Averages (SMA), they have positive and negative gradients. This may suggest a lack of conviction for directional momentum that might see further range trading.

      Re-iterating this possibility is the price criss-crossing the 10-day SMA. Recent history has shown that when the price crosses the 10-day SMA, momentum in that direction continues. That is not the case over the last week.

      The recent low of 0.9470 may provide support ahead of the break point at 0.9460. On the topside, resistance might be at the break point of 0.9710 or the July peak of 0.9886.

       Chart created in TradingView

      Daniel McCarthy, Strategist Daily FX

      Source: Daily FX
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