European currencies continue to move higher, reaching previously targeted levels as demand for both the euro and sterling remains firm. The rally is unfolding amid evolving market expectations and persistent weakness in the US dollar. That said, as prices approach important resistance zones, traders are increasingly cautious, recognising the potential for momentum to ease and price action to stabilise.
Much of the support for the euro and pound stems from anticipation surrounding upcoming economic releases from the UK and the eurozone, which remain central to investor focus. Data on growth and business activity could reshape expectations for central bank policy and influence demand for both currencies. Meanwhile, attention is also firmly on forthcoming US figures, which may shift the current balance and alter expectations for the Federal Reserve’s next steps.
EUR/USD
EUR/USD is trading in the 1.1800–1.1830 area, maintaining bullish momentum after its recent breakout. From a technical perspective, further upside towards 1.1900–1.1940 is possible if 1.1800 continues to act as support. However, a pullback towards 1.1740–1.1760 remains a risk, particularly if eurozone data disappoints or US indicators come in stronger than expected.
Key events for EUR/USD:
- today at 13:45 (GMT+3): speech by Bundesbank representative Mauderer;
- today at 15:30 (GMT+3): Philadelphia Fed Manufacturing Index (US);
- today at 19:45 (GMT+3): speech by Bundesbank President Nagel.
GBP/USD
GBP/USD is following a similar trajectory, holding near recent highs within an ongoing uptrend. However, a “harami” pattern identified on the daily chart signals a potential pause in the rally. Confirmation of this pattern could trigger a decline towards 1.3480–1.3500. On the upside, a break above 1.3590 may open the way for gains towards 1.3670–1.3700.
Key events for GBP/USD:
- today at 09:00 (GMT+3): UK Gross Domestic Product (GDP);
- today at 10:55 (GMT+3): UK manufacturing output;
- today at 18:40 (GMT+3): speech by Bank of England Deputy Governor Woods.
Overall, European currencies remain in an advancing phase but are approaching levels that may challenge further upside. Upcoming economic data will be decisive: strong releases could extend the rally, while weaker figures may lead to consolidation or a corrective pullback.
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