After the euro’s brief rebound against the greenback, the common currency failed to extend its gains. We believe that the upside potential in the EUR/USD could be limited ahead of the highly anticipated FOMC meeting next week. A current resistance is seen at 1.1215 and euro bulls would need to clear that hurdle significantly in order to revive fresh bullish momentum towards 1.1270. However, we generally favor a bearish bias on the euro and expect the downward pressure to increase in the near term.
The British Pound experienced a significant recovery against the U.S. dollar. Ahead of tomorrow’s BoE monetary policy announcement, investors might be risk-averse, dampening the demand for sterling. As long as GBP remains below its next resistance at 1.5435, we expect the currency to be vulnerable to bearish corrections.
U.K. Industrial Production and Trade Balance are scheduled for release at 8:30 GMT. Apart from that, there are no major economic reports due for release today.
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