The U.S. dollar is on the backfoot so far today, which has given the Euro a chance to push ahead to some key upside resistance levels. We are currently looking at the Fibb retracement level on the upside at 1.1884 as the key level for today’s trading, with any breach to the upside leaving a big gap up to the next levels that could well be all the way up at 1.1930 and then 1.2000.
Shorter term the chart still looks strong after the moves of the last couple of days but with the volume low, it could be a normal continuation we are looking at, which could point to a slight correction into the close or on the open on Sunday night.
The British pound/U.S. dollar (GBP/USD) currency pair is in the same situation with U.S. dollar weakness and is also looking at an upside fib retracement as its key next level of resistance. After this week’s headline in the UK we have seen a far degree of volatility on sterling pairs, and with the grim growth picture painted by the chancellor on Wednesday you could have expected some more downside. But the US dollar weakness has really made the pound the more attractive proposition.
A continuation of this move takes us back up towards the 50% fib retracement of the recent move from highs at 1.3655 to the lows at 1.3026. The level is 1.3340, with any break to the upside looking to test the 61.8% at 1.3415. To the downside we would look at the trendline support down around the 1.3120’s.