Yesterday’s price development has proved to be unsuccessful for breakout traders as both major currency pairs traded sideways without any sign of a clear trend. The euro marked a short-term support at 1.1375 and we will now focus on a break below 1.1370 and farther 1.1335.
We see a higher likelihood of upcoming bearish momentum if the pair is able to break below its next support levels shown in the chart. Below 1.1335 the euro may head for a test of 1.1280. However, euro bulls might keep an eye out for pullbacks close to these support zones, which may result in a rise towards possible resistance levels at 1.1415 and 1.1435.
Monday was not a good day for sterling traders as the currency pair traded choppily sideways, triggering both long and short entries, which were eliminated by the stop-loss shortly afterwards. Nevertheless, we are looking for upcoming breakouts in this pair within the next two days as the Quarterly Inflation Report lies ahead. Technically we see a lower support at 1.4345 and if sterling slips below that level, a next bearish target could be at 1.4315. On the upside we expect the 1.4470-level to act as a short-term resistance. A renewed break above 1.4525 could change the bias in favour of the bulls.
U.K. Trade Balance numbers are scheduled for release today at 8:30 UTC and could have a minor impact on the GBP.
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