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Euro And Cable Trend Sideways, Time For Breakouts?

Dear Traders,

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.

EUR/USD

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.

Chart_EUR_USD_4Hours_snapshot10.5.16

GBP/USD

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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