The euro rejected 1.1270 and plunged into negative territory. The British pound, however, traded flat within an 80-pip trading range while larger market movements are still lacking.
Today's attention will be on the FOMC meeting minutes from the Federal Reserve's most recent meeting and traders will be looking for clues on the pace of interest rate hikes. The minutes are due at 18:00 UTC and traders should prepare for volatile swings even ahead of that release.
No less important could be a speech by ECB President Mario Draghi who speaks in Madrid at 12:45 UTC.
Is the euro rally fading? This is the crucial question, so we should take a look at the technical picture.
EUR/USD
After failing to break above 1.1270 the euro reversed and closed below 1.12. The daily close below 1.12 suggests that we might see a stronger pullback which could be in play as soon as the euro dips below 1.1160. The focus then shifts to lower targets at 1.1120 and 1.11. We bear in mind that euro bulls are likely to buy euros at lower levels so a potential correction could be limited until these levels. However, if the euro falls below 1.1070, a steeper slide is possible targeting 1.10. Bullish breakout traders should however pay attention to prices above 1.1270, providing a basis for a test of 1.1320.
GBP/USD
Not much has changed in the technical picture since the cable continued its sideways trend. As long as prices fluctuate between 1.3080 and 1.29 the recent upward trend channel is considered intact. Traders should pay attention to price breakouts above or below these levels.
Here are our daily signal alerts:
EUR/USD
Long at 1.1215 SL 25 TP 30, 100
Short at 1.1160 SL 25 TP 20, 40
GBP/USD
Long at 1.3020 SL 25 TP 40, 100
Short at 1.2940 SL 25 TP 30, 90
We wish you good trades and many pips!
Disclaimer: Any and all liability of the author is excluded.