The EUR/USD pair is currently exhibiting positive signs, trading above the 1.0800 support level. The pair is now eyeing a potential breakout above the 1.0880 resistance, as indicated on the 4-hour chart. In recent trading sessions, the Euro has shown resilience against the US Dollar, forming a solid base above 1.0800 and initiating a new upward move past the 1.0825 resistance level. Furthermore, the pair has managed to surpass both the 200 and 100 simple moving averages on the 4-hour chart.
Upon closer inspection, it is evident that EUR/USD has breached the 50% Fib retracement level from the recent downward correction, signaling a possible upward momentum. The pair is now challenging a key bearish trend line with resistance at 1.0860 and is approaching the 61.8% Fib retracement level. A clear break above 1.0860 could pave the way for a push towards the 1.0900 level, with further gains targeting 1.0950 in the short term. However, failure to breach the resistance at 1.0860 may result in a corrective pullback.
If the pair retraces, immediate support is likely to be found near 1.0820, followed by significant support at 1.0800 and the 100 simple moving average on the 4-hour chart. A break below the 1.0800 support level could lead to a test of the 200 simple moving average at 1.0750, with additional losses exposing the 1.0720 level.
GBP/USD Potential Upside
Meanwhile, the GBP/USD pair is poised for potential bullish momentum if it manages to clear the crucial resistance at 1.2750. Despite facing hurdles in recent sessions, the pair remains within striking distance of a breakout, which could propel it towards higher levels in the near future.
On the other hand, gold prices have experienced a setback, with a notable decline below the $2,350 support zone. The bears have exerted pressure on the precious metal, causing it to drift lower in recent trading sessions.
In terms of economic releases, the German IFO Business Climate Index for May 2024 is forecasted to come in at 90.3, surpassing the previous reading of 89.4. Similarly, the German IFO Current Assessment Index is expected to improve to 89.9 from 88.9, while the German IFO Expectations Index is forecasted to rise to 90.5 from 89.9. These key economic indicators are likely to have an impact on the currency market, particularly on the Euro.
Overall, the currency market is poised for significant movements, with the EUR/USD and GBP/USD pairs facing key resistance levels. Traders and investors should closely monitor these developments to capitalize on potential trading opportunities in the forex market.
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