EUR/USD and GBP/USD Price Forecast: Awaiting US FOMC Insights and Consumer Credit Data

Highlights

• The EUR/USD pair, with a slight increase and a pivot point at 1.09706, balances between resistance and support levels.
• The GBP/USD shows a marginal decline, with a pivot point at 1.26983.
• Recent economic data releases, including the Eurozone’s CPI and the U.S.’s labour market reports.
• Upcoming events like the FOMC Member speech, play a crucial role in shaping the short-term trajectories of both currency pairs.

EUR Rises Modestly, GBP Sees Slight Decline Amid Economic Uncertainties

As we delve into the foreign exchange market this week, the EUR/USD and GBP/USD currency pairs exhibit distinct movements reflective of current market dynamics.

The EUR/USD pair has experienced a slight uptick, trading at 1.09459, an increase of 0.04% in the last 24 hours, amidst a backdrop of stable Eurozone economic data and a robust U.S. labor market.

Conversely, the GBP/USD pair has seen a marginal decrease to 1.27143, down by 0.01%, as it navigates through the mixed signals from both domestic and international economic fronts.

Looking ahead, traders and analysts are keenly anticipating the impact of upcoming economic events, including speeches from FOMC members and U.S. consumer credit data, which could significantly influence the direction of these major currency pairs in the short term.

EUR/USD Technical Forecast

In the dynamic foreign exchange market, the EUR/USD pair, as of January 8, offers a complex yet insightful picture. Trading at 1.09459, the pair has seen a modest increase of 0.04% in the last 24 hours.

The pivot point for EUR/USD is set at 1.09706, a key level that may dictate short-term movements. Resistance levels are staged at 1.10489, 1.11393, and 1.11994, each representing a potential ceiling in the pair’s upward trajectory.

Conversely, support is found at 1.08794, followed by 1.07995 and 1.07203, offering areas where the Euro might find a floor against the Dollar.

Technical indicators paint a picture of cautious neutrality. The Relative Strength Index (RSI) stands at 46, suggesting a balanced, albeit slightly bearish sentiment.
The EUR/USD is trading near the 50-day Exponential Moving Average (EMA) of 1.09672, indicating a potential for either trend direction.

Chart patterns reveal an upward trendline, supporting a buying trend at 1.08794. However, the presence of Doji candles suggests market indecision, potentially keeping the EUR/USD consolidated.

Economic Events: Friday’s economic data showed mixed signals. The Eurozone’s Core CPI and CPI Flash Estimates remained stable, while the PPI showed a decrease, indicating subdued inflationary pressures. Italian Prelim CPI remained unchanged.

In contrast, U.S. data revealed a stronger labor market with higher-than-expected Non-Farm Employment Change and stable unemployment rates. These releases have a nuanced impact on the EUR/USD pair, balancing inflationary expectations with employment strength.

Looking forward, the EUR/USD pair seems positioned for a bullish trend above the 1.08794 mark, contingent upon upcoming economic events like the German Factory Orders and Sentix Investor Confidence. These data points could provide further clarity on the Eurozone’s economic health, influencing the pair’s direction.

GBP/USD Technical Forecast

On a 4-hour chart, the GBP/USD is mapped out with a pivot point at 1.26983, serving as a crucial juncture for future price movements. Key resistance levels for the pair are positioned at 1.27662, 1.28259, and 1.28736. These levels will likely act as critical barriers in the pair’s upward journey.

On the flip side, immediate support is found at 1.26594, followed by lower levels at 1.26147 and 1.25684. The resilience of these supports could be instrumental in preventing further declines.

Technical indicators offer additional insights into the pair’s dynamics. The Relative Strength Index (RSI) stands at a moderate 54, pointing towards a slightly bullish sentiment but lacking strong conviction.

The 50-day Exponential Moving Average (EMA) of 1.25755 further reinforces this, as the current price is above the EMA, hinting at a short-term bullish trend.

Chart patterns depict an upward trendline, suggesting a buying trend. However, the emergence of Doji candles indicates a neutral bias, hinting at potential consolidation in the GBP/USD pair.

Economic Events: Friday’s economic data included a higher-than-expected Halifax HPI from the UK and strong US labor data, with an unchanged unemployment rate.

No significant UK economic events are scheduled for today, but US events like the speech by FOMC Member Bostic and the Consumer Credit report could influence the pair.

In conclusion, the current trend for the GBP/USD pair is cautiously bullish, particularly above the pivot point of 1.26983. This forecast is hinged on upcoming economic events and market sentiment, which could pivot the pair’s trajectory.