EUR/GBP likely completed a correction and would resume its downtrend below 0.8880. USD/CHF is under pressure and approaching a short term break below 0.9600.
EUR/GBP Forecast – Euro To Resume its Downtrend
- The Euro has started a major downside move and is currently trading below the 0.8900 handle against the British Pound.
- There is a crucial bearish trend line forming with resistance at 0.8890 on the hourly chart of the EUR/GBP pair.
- Today in the UK, the Retail Sales for August 2017 was released by the National Statistics.
- The forecast was +0.2%, but there was an increase of 1% (MoM) in the Retail Sales.
The Euro is under a lot of pressure and already broke the 0.8950 support against the British Pound. The EUR/GBP pair after trading as low as 0.8777 started a recovery, but upsides were capped by 0.8900.
The pair failed to break the 50% Fib retracement level of the last decline from the 0.9039 high to 0.8777 low, the 100 hourly simple moving average and a crucial bearish trend line with resistance at 0.8890 on the hourly chart.
The pair is once again moving down and broke a bullish trend line with support at 0.8877. The overall trend is still bearish and any rallies towards 0.8880 can be considered as selling opportunity in the short term.
UK’s Retail Sales
Today, the UK saw the release of the Retail Sales for August 2017 by the National Statistics. The forecast was slated for a rise of 0.2% in sales compared with the previous month.
However, the actual result was above the forecast, as there was an increase of 1% in the Retail Sales in August 2017. In terms of the yearly change, the market was looking for the sales to increase by 1.1%. The actual was better, as there was a rise of 2.4% in sales.
The Core Retail Sales was aligned for a rise of 0.2% in sales compared with the previous month, but it came in at 1%, more than the last 0.7%.
The overall result was positive, and it is most likely to weigh on EUR/GBP for declines towards 0.8810 in the near term.
USD/CHF Forecast – US Dollar at Risk of Further Declines
- The US Dollar after trading towards 0.9565 against the Swiss Franc started an upside move.
- At present, the pair is attempting to break an ascending channel support at 0.9600 on the hourly chart of the USD/CHF pair.
The US Dollar started a recovery after trading as low as 0.9564 against the Swiss Franc. The USD/CHF pair traded higher and moved above the 38.2% Fib retracement level of the last decline from the 0.9702 high to 0.9564 low.
The recovery was initiated with an ascending channel with support at 0.9600 on the hourly chart. The pair tested the 61.8% Fib retracement level of the last decline from the 0.9702 high to 0.9564 low, failed to break and traded below the 100 hourly simple moving average.
At the moment, the pair is attempting a downside break below 0.9600 and if it succeeds, it could trade back towards the 0.9580 or even 0.9565.
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