EUR/USD & GBP/USD: Is The Heavy Sell-Off Coming To An End?
Welcome to a new trading week.
EUR/USD: Long-term bias remains bearish, even though short-term bullish reversal could be in the cards
The euro’s sell-off is due primarily to three reasons: The divergence in monetary policy between the Federal Reserve and the European Central bank, the fallout from the Ukraine war and a negative market sentiment. Even though these reasons should keep the euro under pressure, bears were unable to create a lower low when testing the 1.0340-support area. However, if this crucial support-level breaks, the focus will shift to parity. In the positive case, however, if the euro holds above 1.0350, bulls may push the pair towards another test of 1.0570-1.06. Above 1.0660, a next bullish target could be at 1.0770.
GBP/USD: The cable dipped again below 1.20 last Friday and traders wonder whether the 1.19-support area could be tested. As long as sterling bulls are unable to push the pair above 1.23, we may see lower price targets such as 1.1820 and possibly even 1.1750. From a fundamental perspective and even though the economic outlook in the U.K. remains gloomy, sterling’s heavy sell-off may abate, due mainly to a weakening U.S. dollar.
Trading could be quiet today as U.S. markets will be closed for the Independence Day holiday.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumption of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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