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EUR/USD and GBP/USD await US CPI data, EUR/GBP side-lined

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EUR/USD, EUR/GBP and GBP/USD continue to be short-term side-lined ahead of key US CPI data.



EUR/USD recovers from breached resistance line, now support line

EUR/USD’s retracement from its January and early February highs at around $1.1483 did a ‘return to point of breakout’ by slipping back to the breached 2021-to-2022 downtrend line, now because of inverse polarity a support line at $1.1392, before stabilising above it.

Slightly further down the late November and December highs at $1.1386 to $1.1382 may act as additional support as well as the mid-point of Thursday’s long ‘body’ of its candle at $1.1368 ahead of today’s US consumer price index (CPI) data. The ‘body’ shows the distance between the open and the close of a candle.

The January and current February highs at $1.1382 to $1.1383 will need to be exceeded for EUR/USD to continue its ascent towards the next higher October and 5 November lows at $1.1513 to $1.1529.

EUR/USD chartSource: IT-Finance.com

EUR/GBP is side-lined

EUR/GBP continues to oscillate around the 55-day simple moving average (SMA) at £0.8425, having found minor support at £0.8413 over the past couple of days.

While this level underpins, resistance above Monday’s high at £0.8478 may be revisited and perhaps also the 2020-to-2022 downtrend line at £0.8486 and even the 200-day SMA at £0.8512.

A slip through the £0.8413 low would probably lead to a tumble back towards the November trough at £0.8381 being seen.

EUR/GBP chartSource: IT-Finance.com

GBP/USD still hovers above minor support ahead of US CPI data

GBP/USD saw a minor retracement from its early February high at $1.3628 to the mid-November high, 38.2% Fibonacci retracement and 6 January low at $1.3513 to $1.349 from where it recovered. Further sideways trading is expected to be seen whilst awaiting US CPI readings later today.

For now, yesterday’s high, two-month downtrend line and 61.8% Fibonacci retracement at $1.3589 to $1.3599 are expected to put a lid on the cross. Slightly above this resistance sits the recent $1.3628 high.

Only a slip through Monday’s $1.349 low would have bearish implications and would push the $1.3442 to $1.3431 support zone to the fore. It consists of the early and late January lows and the 55-day SMA. Further down lies the January trough at $1.3359.

GBP/USD chartSource: IT-Finance.com

Axel Rudolph | Market Analyst, London
10 February 2022
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