EUR/USD and GBP/USD Price Forecast: EUR Struggles Near $1.09706; Bearish Bias Looms

Highlights

• EUR/USD experiences a subtle decline to 1.09434, reflecting mixed Eurozone economic data.
• GBP/USD sees a minor retreat to 1.2733 amid US economic uncertainties.
• EUR/USD approaches key resistance at $1.0971, indicating potential market shifts.
• GBP/USD’s technicals hint at possible bearish trend near 1.2763 resistance.
• US Trade Balance and FOMC Member Barr’s remarks expected to influence EUR/USD and GBP/USD movements.

EUR and GBP Rises with Focus on US Economic Optimism

Yesterday, the EUR/USD pair closed at 1.0950, marking an increase of +0.09%. This uptrend is influenced by a mix of Eurozone economic data and anticipations surrounding upcoming employment rates.

German Industrial Production experienced a downturn, while French Trade Balance data revealed a significant deficit. Investors are now eyeing the Italian Monthly Unemployment Rate and the broader Eurozone Unemployment Rate for further cues.

Additionally, Federal Reserve’s Bostic’s remarks on inflation dynamics and unemployment trends are shaping expectations and could impact future currency market movements.

Meanwhile, the GBP/USD pair saw a slightly stronger increase, closing at 1.2747, up by +0.25%. The absence of major UK-specific economic events has shifted focus to broader market influences, including US-centric developments like the RCM/TIPP Economic Optimism index, statements from FOMC Member Barr and Trade Balance.

Events Ahead

During the US session, investors will be also closely monitoring the US Trade Balance figures and remarks from FOMC Member Barr for additional insights into market dynamics.

The trade balance data will offer a snapshot of the difference between a country’s exports and imports of goods. A positive balance of trade, also known as a trade surplus, occurs when a country exports more goods than it imports. Overall, surplus is considered good for US dollar.

While Barr’s speech could shed light on the future monetary policy, crucial for currency valuation. Therefore, the market is poised to react to these developments, potentially impacting the EUR/USD and GBP/USD direction.

EUR/USD Technical Forecast

The EUR/USD pair, as of January 9, is experiencing a slight decline, marked by a 0.06% drop to 1.09434. This subtle shift hints at an indecisive market sentiment. Technical indicators present a complex picture: the pivot point is established at $1.0971, with immediate resistance levels looming at $1.1049 and $1.1139. These levels serve as potential barriers to the pair’s upward trajectory.

On the flip side, the support levels at $1.0879, $1.0800, and $1.0720 could provide crucial cushions against further declines. The Relative Strength Index (RSI) stands at 46, hovering near the midpoint, indicating a balanced market stance without clear bullish or bearish dominance.

The price positioning around the 50-Day Exponential Moving Average (EMA) of $1.0965 adds to this ambiguity, suggesting a short-term trend is yet to be established firmly. A notable chart pattern is the formation of a double top near 1.09706. If the EUR/USD remains below this critical level, it might trigger bearish tendencies.

GBP/USD Technical Forecast

The GBP/USD pair, as of January 9, is subtly retreating, trading at 1.2733, marking a decrease of 0.12%. This minor downtrend is reflective of the broader uncertainties in the market.

Technically, the pair’s pivot point is stationed at $1.2764, with key resistance levels identified at $1.2826 and $1.2874. These resistance points may cap any significant upward movements.

The Relative Strength Index (RSI), at a moderate 56, suggests a slightly bullish market sentiment, yet the lack of stronger conviction indicates the market’s indecisiveness. The positioning of GBP/USD near the 50-Day Exponential Moving Average (EMA) at $1.2702 offers a glimpse of potential bullishness.

However, the formation of a triple top pattern around 1.2763 signals a possible resistance to further upward movements, suggesting a bearish outlook unless the pair successfully breaches this level.