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EURGBP DAILY CHART – TRENDLIUNE TESTED
EURGBP tested its trendline at .8602, holding and taking some pressure off GBPUSD for now
Key res is at .8620.
Breakout above .8577 makes this first support that needs to hold to keep .8600 in play
Note, markets have pushed up expectations of a BOE rate cut to June, which has weighed on GBP
EURUSD 4 HOUR CHART – Magic level a focus]
The failure to test 1.0945 has seen EURUSD retreat in line with a firmer USD.
The key chart support, as I noted yesterday, is 1.0795 but the magic 1.08 level is probably equally important as it will dictate the tone going forward.
On the upside back above the broken 1.0831, at a minimum, would be needed to ease the risk to 1.08.
No data from the US today.
GBUSD DAILY CHART – Bailey turns dovish
The old trading adage that it’s the reaction to news more than the news itself that matters held true in the GBPUSD as it took another leg down after dovish comments from BOE Bailey in an FT article. Price moves (note firmer EURGBP as well) underscore how interest rate cut expectations are driving these markets.
I had to go to the daily chart to find potential support levels on the downside, So far, an AT support at 1.2578 is holding, below it there is one level ahead of the pivotal 1.25.
Hard to chase after a big move but it trades soft below the lower end of intra-day resistance is at 1.2645-75,.
Take a look at the 2 blue AT lines on the daily chart, the failure to test the 2nd line, and how the risk turned to the downside.
