EURUSD and GBPUSD stay in a bullish consolidation
EURUSD chart analysis
During the Asian session, the euro weakened slightly against the dollar but recovered during the European session. In France, Spain, and Italy, the number of newly infected is reaching new highs since the beginning of the pandemic. Notes from the last meeting of the US Federal Reserve showed that the US Federal Reserve is committed to a faster and more aggressive increase in the reference interest rate this year. The reference yield of 10-year US Treasury bonds jumped to its highest level since March last year, to 1.75%. Currently, the EURUSD pair is at 1.13200 dollars, representing the European currency’s strengthening by 0.10% since the beginning of trading tonight.
- We need the continuation of the positive consolidation from yesterday, which would raise us above the MA50 moving average and 1.14000.
- Our main target and obstacle is the upper trend line and zone around 1.15000.
- A break above the trend line would increase the bullish pressure on the pair, and our next potential resistance zone is around 1.17000.
- Additional resistance to 1.17000 is our MA200 daily moving average.
- We need a negative consolidation to pull the pair below the MA20 moving average and 1.13000. Then we can expect to descend further to the 1.12000 area of previous support, last year’s low.
- The break below opens the door to new lower levels, and the psychological level awaits us at 1,10000.
GBPUSD chart analysis
Prime Minister Johnson still does not want to introduce additional measures, even if Britain records new record numbers of newly infected with the coronavirus. During Asian trade, the British pound weakened sharply against the dollar. Currently, the GBPUSD pair is hovering around $ 1.35330, which represents a weakening of the British currency by 0.13% since the start of trading tonight.
- As we can see in the chart, the pair withdrew from yesterday’s high to 1.36000 last night.
- Since the beginning of this bullish momentum, we have support in the MA50 moving average.
- Now we expect to climb again to the zone around 1.36000.
- Another resistance at that level is the upper trend line, which can be an obstacle for continuing the bullish trend.
- If the pair breaks above, our target zone is around 1.37000, and we were there last time in November last year.
- We need a negative consolidation below the MA50 moving average and below 1.35000.
- After that, our target is the previous support zone 1.33500-1.34000.
- Additional potential support at this level is in the MA200 moving average.
British spending on credit and debit cards fell in the last week until December 30, which covered the Christmas holidays. Spending on cards fell 40 percentage points from the previous week to 86% of its average level in February 2020, before the COVID-19 pandemic.
The number of customers in the UK deteriorated sharply in December, to 18.6% below 2019 levels, compared with a 14.5% drop in November due to increased consumer nervousness due to the rapid expansion of the Omicron variant.
The Springboard researcher said that his data, from November 28 to January 2, show that the number of buyers decreased from 2019 before the pandemic affected trade.
“The natural increase in customer activity that usually happens before Christmas has not materialized. The reason is mixed due to consumer nervousness about the rapid rise in infections and the risk of missing Christmas, isolating households due to infection, and reintroducing work from home, said Springboard director Diane Vehicle.
The researcher noted that in the fourth week (the week starting December 19), the gap from 2019 decreased to 13.8% in all retail destinations in the UK compared to a decline of 19.1% the week before, as consumers used most of the six available trading days in the week before Christmas.
The post EURUSD and GBPUSD stay in a bullish consolidation appeared first on FinanceBrokerage.