The euro continued its losing streak on the back of concerns over the future of the European union. Prospects of an euro-sceptic coalition in Italy have renewed the political risk for the euro. Italy’s League and Five Star Movement appear to be inching towards sealing a deal to govern the country, putting the euro area’s stability at risk. The euro-skeptic coalition could be confirmed as early as today so the euro may remain under selling pressure.
EUR/USD The single currency continued its tailspin and fell towards 1.1740. A next crucial support area is now seen at around 1.1730-1.1710, followed by 1.1670. Based on the recent trend channel the euro could also extend its slide towards 1.1630. Current resistances are seen at 1.1820 and 1.1880.
EUR/USD 4-Hour Chart
GBP/USD The British pound dropped towards the declining trend line of its recent downtrend channel and signs could point to further pound weakness, provided that channel is significantly breached to the downside. This week’s focus will turn to inflation and GDP figures. Sterling traders will watch the U.K. Consumer Price Report on Wednesday, followed by the Retail Sales Report Thursday and GDP report on Friday. If the headline CPI comes in below expectations, we may see the pound dropping towards 1.33 with sterling bulls eliminating any remaining hope for an August rate hike.
The pound broke below its recent trading range this morning and fell towards 1.3420. If the pound refrains from a break below 1.3420 it may correct some of its recent losses. A current resistance is seen at around 1.3550.
GBP/USD 4-Hour Chart
From the U.S. we have the FOMC meeting minutes on Wednesday but the minutes are not expected to serve as a big market driver. Here are our daily signal alerts:
EUR/USD Long at 1.1790 SL 25 TP 18, 30 Short at 1.1730 SL 25 TP 20, 50 GBP/USD Long at 1.3492 SL 25 TP 15, 30 Short at 1.3425 SL 25 TP 20, 40 We wish you good trades and many pips! Disclaimer: Any and all liability of the author is excluded.