EURUSD and GBPUSD: Failed to Hold the Higher Level

During the Asian trading session, the euro tried to climb above the 1.00500 level.
During the Asian session, the pound advanced against the dollar to 1.17000 levels.
Inflation rose to 9.1% in August from 8.9% in July.

EURUSD chart analysis

During the Asian trading session, the euro tried to climb above the 1.00500 level, but without success, because a pullback followed. The EURUSD pair failed to hold on to the 1.00000 level, and we saw a break below to the 0.99750 level. Now the euro is consolidating again in the previous two hours and could climb back above the 1.00000 level. If we succeeded, we would get additional support in the MA200 moving average. Then we need to stay above it, so we can try to continue with the recovery. Again, our target is 1.00500, our two-day resistance level. A potential higher target is the 1.01000 level. We need a continuation of today’s negative consolidation for a bearish option. The euro could continue to support at the 0.99500 level. If it fails to hold there, the potential lower target is the 0.99000 level.

GBPUSD chart analysis

During the Asian session, the pound advanced against the dollar to 1.17000 levels. There we encounter resistance and see a pullback to the 1.16200 level. We are very close to potential support at the 1.16000 level. The last time we were there was in March 2020. For a bearish option, we need a continuation of the negative consolidation and a test of support at the 1.16000 level. Then we need a break below to continue the bearish trend. Potential lower targets are 1.15500 and 1.15000 levels. For a bullish option, we need a new positive consolidation. After that, the pair could start a recovery up to the 1.17000 level. If we manage to climb above, we will find support in the MA20 and MA50 moving averages. Potential higher targets are 1.17500 and 1.18000 levels.

Market Overview

Eurozone inflation hit a new record in August, reflecting a deepening cost-of-living crisis and adding tension on the ECB to tighten policy more aggressively as early as next week. Inflation rose to 9.1% in August from 8.9% in July, while the forecast was 9.0%. An increase of at least 50 basis points in September is a done thing, and aggressive players are pushing for a 75 basis point increase, said Bert Kolijn, an economist at ING.

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