There is a likelihood that the pair will continue falling as sellers target this support level.

Bearish View

• Sell the GBP/USD pair and set a take-profit at 1.2000.
• Add a stop-loss at 1.2200.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.2150 and a take-profit at 1.2250.
• Add a stop-loss at 1.2050.

The GBP/USD price pulled back on Monday morning as investors prepared for a relatively busy week ahead for the British pound. It dropped to a low of 1.2100, which was the lowest level since August 10th of this year. This price was also sharply lower than this month’s high of 1.2291.

UK Inflation and Jobs Data

The GBP/USD pair came under intense pressure as investors waited for the upcoming economic data from the UK.

On Tuesday, the Office of National Statistics (ONS) will publish the latest jobs numbers from the country. Economists expect the data to show that the labor market continued tightening in June as the recovery continued.

Precisely, analysts expect that the unemployment rate remained unchanged at 3.8% in June this year. They also expect that the country’s employment change in the three months to June was 253k, lower than the previous 296k.

Additional data are expected to reveal that the average earnings excluding bonuses rose from 4.3% to 4.5%. With bonuses, analysts expect that the average earnings index rose by 4.5%.

The GBP/USD price will also react to the upcoming UK consumer and producer inflation data scheduled for Wednesday. Economists expect these numbers to reveal that the country’ consumer inflation continued surging in July as it hit 9.8%. Excluding the volatile food and energy products, analysts believe that inflation rose from 5.8% to 5.9%.

These numbers will come a few days after the Office of National Statistics (ONS) published relatively weak GDP numbers. The data showed that the country’s economy contracted in the second quarter as the cost of living escalated. It shrank by 0.1% quarter on quarter after it expanded by 0.8% in Q1. The economy shrank by 0.6% in June, which was better than the median estimate of 0.4%.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair dropped after the UK published the latest GDP data. It retested the 38.2% Fibonacci Retracement level and moved slightly below the 25-day and 50-day moving averages.

The pair has also found strong resistance at 1.2277, where it struggled to move above this month. As such, this could be a double-top pattern whose neckline is at 1.200.

Therefore, there is a likelihood that the pair will continue falling as sellers target this support level. A move above the resistance point at 1.2180 will invalidate the bearish view.

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The price of the EUR/USD currency pair stumbled again in a rebound higher, as the negative pressures on the euro are still strong and persistent. After attempting to rebound higher at the beginning of this week’s trading, towards the level of 1.0462, it retreated to the vicinity of the support 1.0400, and last week the price of the euro dollar fell towards the support level 1.0365. The exchange rate of the euro against the dollar has slipped again near its lowest levels in the last five years and may risk remaining under pressure near those levels in the coming days unless the US currency stumbles further in the wake of Friday’s stumble.

The single European currency, the Euro, came under pressure from the dollar’s strength early last week and approached its lowest level in five years, after Eurostat data showed mixed overall and core European inflation rates. The dollar’s erratic strength was an important driver of the euro’s losses, and thus the sharp recovery late in the Friday session when the greenback suffered a setback following the release of the ISM manufacturing PMI for June.

Many economists took Friday’s negative ISM PMI surprise as an indication of the ongoing US economic slowdown, a popular concept recently but which did little to help the US dollar on Friday, which fell against many currencies ahead of the weekend’s close. .

The US dollar did not benefit much last week from the ISM manufacturing survey or the Federal Reserve’s (Fed) preferred inflation measure – the core PCE price index – which stalled for June, and in the meantime, the annual rate fell from 4.9%. 4.7% all the way. Both were followed by broad losses for the dollar, although it was also quick to attract buyers from the market during the weakness, and it is now likely that much of the EUR/USD pair this week will depend on the market’s response to important events in the US calendar and to anything emerging. Especially on the ECB policy front.

The euro received no help last week when ECB President Lagarde stressed the importance of discretion regarding the timing and size of any changes in interest rates after the 0.25% hike in July that was previously announced last month. Given the prevailing uncertainty, normalization should remain gradual. Currently, our goal should be to avoid the entrenchment of high imported inflation in the near term by feeding high inflation expectations. That is why we are ending policies that sought to fend off deflationary dynamics, such as net asset purchases and negative rates, said Fabio Panetta, member of the European Central Bank’s Executive Board, on Friday.

added. Further adjustments to our monetary policy stance will depend on the evolution of inflation expectations and the economy. At this point, inflation expectations are around 2% and wage increases remain moderate. We are closely monitoring these developments. We want to see how the economy reacts to tighter financing conditions and a deteriorating global and domestic economic outlook. And with fears that the global economy has been leading markets to speculate lately on their previous assumptions about interest rates, the euro is likely to pay close attention this week when Bundeswehr chief Joachim Nagel and ECB President Lagarde appear publicly on Monday and Friday, respectively.

However, along the way, the minutes of the European Central Bank’s June meeting will expire on Thursday while a number of Fed policymakers are scheduled to speak publicly from Wednesday, which is also when the minutes of the June meeting of the FOMC are released.

Where is the EUR/USD headed?

According to the technical analysis, the general trend for the EUR/USD price is still bearish, and stability below the 1.0500 support will continue to support the bears for a further move down. At the moment, the closest support levels are 1.0380 and 1.0290, which are sufficient at the same time to push the technical indicators towards oversold levels. On the upside, and according to the performance on the daily chart, bulls break through the resistance levels 1.0645 and 1.0800 to make a breach of the current trend.

Because of the hammer pattern, the pair will likely continue rising as bulls target the key resistance level at 1.0480.

Bullish View

• Buy the EUR/USD pair and set a take-profit at 1.0480.
• Add a stop-loss at 1.0375.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 1.0400 and a take-profit at 1.0350.
• Add a stop-loss at 1.04600.

The EUR/USD volatility rose after last Friday’s strong Eurozone consumer inflation data. The pair dropped to a low of 1.0366, which was the lowest level since June 15th of this year. It remains about 3.3% below the highest level in June this year.

European Inflation Surging

The EUR/USD pair saw elevated levels of volatility after Eurostat published the latest consumer inflation data on Friday. The numbers revealed that the bloc’s inflation soared to a record high in June as the cost of energy remained at an elevated level.

The headline consumer inflation data surge to 8.6% in June from 8.1% in May of this year. This increase was higher than the median estimate of 8.5%. Countries like France, Italy, and Spain published record inflation numbers during the week. At the same time, inflation in Germany declined slightly due to fuel tax cuts and public transport discounts, which are temporary.

These numbers came a few days after the European Commission said that consumer confidence has dropped sharply in the past few months. At the same time, many companies in the bloc like Zalando, Volkswagen, and BMW have reported a sharp decline in sales in the past few quarters.

Therefore, the ECB is in a difficult situation as it faces criticism of letting inflation surge substantially above the target of 2.0%. Analysts expect that the bank will deliver its first interest rate hike in over a decade this month. The base case is that the bank will hike by 0.25% although many analysts expect it to hike by 0.50%.

There will be several important economic data from Europe on Monday. Germany will publish the latest trade numbers while Eurostat will deliver the latest producer price index (PPI) data from the region. Analysts expect the data to show that producer inflation surged to 36.7% in June.

EUR/USD Forecast

The four-hour chart shows that the EUR/USD pair made a strong bearish breakout last week. As this happened, the pair formed a hammer pattern, which is usually a bullish sign. The pair is slightly below the important leve at 1.0450, which was the lowest level on June 17th. It is also below the 25-day and 50-day moving averages.

Therefore, because of the hammer pattern, the pair will likely continue rising as bulls target the key resistance level at 1.0480. A drop below the support at 1.0385 will invalidate the bullish view.

There is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence.

Bullish View

• Set a buy-stop at 1.0615 and a take-profit at 1.0700.
• Add a stop-loss at 1.0550.
• Timeline: 1-2 days.

Bearish View

• Sell the EUR/USD and set a take-profit at 1.0500.
• Add a stop-loss at 1.0650.

The EUR/USD pair rose to an important resistance level after a hawkish statement by Christine Lagarde. The pair rose to a high of 1.0615, which was the highest level since June 10th of this year. It has risen by more than 2.2% above the lowest level this month.

Christine Lagarde Points to Rate Hike

The EUR/USD pair rose as Christine Lagarde of the European Central Bank made a statement during the American session.

In it, she reiterated that the bank was focused on fighting inflation. It has already reduced its bond market activity and is now set to deliver its first interest rate hike in years in July. She signaled that the rate hike will be 0.25%. Most importantly, she will pull the ECB out of negative interest rates in September. Lagarde will deliver more remarks on Tuesday.

The EUR/USD also reacted to the latest strong numbers from the United States. Data by the Commerce Department showed that durable goods orders rose from 0.4% to 0.7%, which was higher than the expected 0.1%. Core durable orders rose from 0.2% to 0.7% in May as demand continued rising.

Meanwhile, after two weeks of weak housing data, the US published surprising pending home sales data. According to the National Association of Realtors, pending home sales rose by 0.7% in May compared with April. This was a surprise since pending home sales dropped in the previous six straight months.

Pending home sales rose even as the 30-year fixed mortgage rate rose to 5.64%. At the same time, the supply of homes has started rising, according to Realtor.com.

The next key data to watch will be the upcoming US consumer confidence number by the Conference Board. Analysts expect the data to show that consumer confidence dropped to 100 in June as inflation surged.

EUR/USD Forecast

The EUR/USD pair has formed an ascending triangle pattern on the four-hour chart. It moved to the upper side of this triangle and it remains slightly above the 25-day and 50-day moving averages. The Stochastic Oscillator has moved slightly below the overbought level.

The pair formed an evening star pattern, which is usually a bearish sign. Therefore, there is a possibility that the pair will drop to the key support at 1.0540 as the triangle pattern nears its confluence. In the coming days, it will likely have a bullish breakout as bulls target the key resistance at 1.0700.

Since it has formed a small head and shoulders pattern, there is a likelihood that it will have a bearish breakout to about 28,368.

Bearish View

• Sell the BTC/USD pair and set a take-profit at 28,368.
• Add a stop-loss at 31,000.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 30,500 and a take-profit at 31,500.
• Add a stop-loss at 29,000.

The BTC/USD price is still in a consolidation phase as investors focus on the new developments in the industry. Bitcoin is trading at 29,650, where it has been in the past few days. This price is 8.42% below the highest level last week. Its market cap has dropped to about $565 billion.

Bitcoin is Still Ranging

Bitcoin has been in a consolidation phase as investors start preparing for a recession in the next few months. Some of the most important companies in the US like Walmart, Target, JP Morgan, and Tesla have all issued a warning about the state of the economy.

This is one of the top reasons why American stocks declined sharply last Friday. The blue-chip Dow Jones index declined by more than 340 points while the Nasdaq 100 and S&P 500 indices fell by more than 1.50%. In the past few months, Bitcoin has been having a close correlation with American stocks.

The BTC/USD pair is also consolidating as the volume of buyers has declined. On-chain data shows that inflows into Bitcoin have been a bit limited in the past few weeks. Investors are simply afraid of buying Bitcoin in a period when the Fed has already started implementing quantitative tightening. It started reducing its balance sheet last week by about $47 billion. It expects to double this amount to about $95 billion in the coming months.

In addition to QT, the Fed has started hiking interest rates. This month, the bank is expected to hike interest rates by 0.50%. It will then hike by 0.50% in the upcoming two meetings and then likely pause on more hikes.

The BTC/USD pair is also moving sideways as the put to call ratio remains in a tight range. The ratio is currently at 0.68, where it has been in the past few days.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair is consolidating. The pair is trading at 29,667, which is lower than last week’s high of 32,290. It has moved below the important resistance level at 31,426, which was the highest point on May 16th. The pair has also dropped slightly below the 25-day and 50-day moving averages while the Relative Strength Index is slightly below the neutral point at 50.

Therefore, since it has formed a small head and shoulders pattern, there is a likelihood that it will have a bearish breakout to about 28,368.

There is a likelihood that it will soon have a bearish breakout to retest last week’s low of 1.0473.

Bearish View

• Sell the EUR/USD and set a take-profit at 1.0480.
• Add a stop-loss at 1.0650.
• Timeline: 1 day.

Bullish View

• Set a buy-stop at 1.0600 and a take-profit at 1.0650.
• Add a stop-loss at 1.0500.

The EUR/USD pair is crawling back as investors rush to buy the dip following the spectacular decline in April. The pair is trading at 1.0545, which is slightly above last week’s low of 1.0472. That price was the lowest it had been since 2020 and was about 6% below the highest level in April.

Eurozone Concerns Remain

The EUR/USD has been under intense pressure in the past few weeks as investors remain concerned about the divergence between the Fed and the European Central Bank (ECB). The Fed is expected to sound more hawkish when it completes its meeting later this week. The overall expectation is that the bank will deliver a 0.50% rate hike and signal that it will deliver such hikes later this year.

Signs of a hawkish come at an interesting time for the American economy. Data published last week showed that pending home sales dropped for the fifth straight month. Further numbers revealed that the American economy had its first contraction since 2020 in the first quarter.

Therefore, there are concerns that the Fed’s tightening to fight inflation could have the unintended consequences of causing a recession. Besides, the yield curve made its first inversion in years a few weeks ago.

The key data to watch today will be German retail sales. Economists expect the data to show that sales rose by 0.3% in March on a month-on-month basis, leading to an annualized increase of 6.1%. The European Commission will also publish the latest business and consumer confidence numbers. Economists expect the data to show that the service sentiment rose to 14.2 while the industrial sentiment fell to 9.5.

The EUR/USD will also react to the latest Eurozone and US PMI data. Still, the biggest focus among investors will be focused on the upcoming Fed decision and the latest non-farm payrolls (NFP) data.

EUR/USD Forecast

The EUR/USD pair has been in a strong bearish trend in the past few days. It has attempted to crawl back in the past few days. The price is trading at the middle line of the Bollinger Bands and is slightly below the 23.6% Fibonacci retracement level.

At the same time, the Relative Strength Index (RSI) has moved slightly above the oversold level while the Stochastic Oscillator is approaching the overbought level. It has also formed what looks like a bearish flag pattern. Therefore, because of this pattern, there is a likelihood that it will soon have a bearish breakout to retest last week’s low of 1.0473.