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


ArvinIG

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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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