There was nothing to gain for day traders on Thursday with the price action in both major currency pairs EUR/USD and GBP/USD remaining limited to a tight trading range. Rather, we suffered losses while trying to benefit from the choppy swings yesterday. The moderate market development can be attributed to lacking fundamental headlines, while the first day of the EU Leaders summit ended without a deal on migration issues. However, those that had a look at the market in today’s early trading hours may have wondered what happened to the euro which showed an impressive rise towards a high at 1.1666. News that EU leaders have reached a deal on migration at the summit spurred the euro’s bullish price action in early Asian trading. The euro jumped at the prospect of the deal defusing a dispute over how to share the burden of immigration within the EU.
EUR/USD: As stated in yesterday’s analysis, as long as the 1.15-support holds we expect the euro to test the 1.17-resistance and possibly even the 1.18-handle.
GBP/USD: The pound rose in tandem with the euro this morning but was unable to overcome the short-term resistance at 1.3130, at least until now. A break above 1.3130 could result in an upswing towards 1.3150/70 whereas a renewed break below 1.3060 could lead to a test of 1.30.
Today we will watch the U.K. GDP Report, due at 8:30 UTC, followed by the Eurozone Consumer Price Index (9:00 UTC) and the U.S. PCE Index (12:30 UTC).
Have a wonderful weekend.
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