EUR/USD, EUR/GBP and GBP/USD slip on stronger dollar and UK retail sales
Outlook on EUR/USD, EUR/GBP and GBP/USD as greenback regains lost ground and UK retail sales come in much stronger-than-expected.
EUR/USD drops as greenback regains lost ground
EUR/USD ran out of steam slightly below its mid-February 2022 low at $1.128 earlier this week when it managed to rally to $1.1275 before coming off again on profit taking ahead of the weekend and as the U.S. dollar regained some recently lost ground.
The April peak at $1.1095 may soon be reached but together with the mid-April high at $1.1075 should act as support on Friday, were it to be reached at all.
Immediate minor resistance can be found at Thursday’s $1.1175 low and further resistance around the $1.12 mark. Above this week’s high at $1.1275 lie the 61.8% Fibonacci retracement of the 2020-to-2022 bear market and the mid-February 2022 low at $1.128.
EUR/GBP comes off its six-week highs
EUR/GBP's rally to its six-week high at £0.8701 as UK inflation slowed more-than-expected is being followed by a short-term decline on the back of stronger-than-expected UK retail sales.
British retail sales in June were boosted by unusually hot weather and a rebound in food sales after a dip the month before when public holidays disrupted normal spending patterns. June retail sales came in at 0.7% versus May, a bigger increase than the 0.2% forecast by economists.
A slip back towards the 55-day simple moving average (SMA) at £0.8617 may thus ensue. Resistance remains to be seen at this week’s £0.8701 high. If a daily chart close above £0.8701 were to unfold, the 200-day SMA at £0.873 would be next in line.
GBP/USD reverses its trend from its 16-month high
Stronger-than-expected UK retail sales on the back of slowing UK inflation seen earlier this week has led to GBP/USD topping out at its $1.3142 16-month high.
The cross is now revisiting its $1.2848 June peak which may offer support. If not, the $1.269 minor support zone may be reached next.
Immediate resistance can be found at Thursday’s $1.2964 high and around the minor psychological $1.30 mark.
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