Market News

EUR/USD and GBP/USD: Impact of Latest Developments

EUR/USD GBP/USD Latest Developments

Explore how recent developments shape EUR/USD and GBP/USD trends in the dynamic foreign exchange landscape.

The U.S. Dollar Index (DXY) is in the spotlight as investors closely monitor the latest developments in jobs data and Federal Open Market Committee (FOMC) minutes, anticipating their impact on the EUR/USD and GBP/USD currency pairs.

Key Economic Reports

This week brings a flurry of significant reports, including the Job Openings and Labor Turnover Survey (JOLTs), the Automatic Data Processing (ADP) report for December, and the Non-Farm Payrolls (NFP) report scheduled for release later this week. Analysts are particularly interested in assessing how dovish Federal Reserve Chair Powell was during the last FOMC meeting, as this could influence market sentiments.

Rate Cut Expectations Adjusted

Maintaining its gains from Tuesday, the U.S. dollar has scaled back expectations of aggressive rate cuts. Previously, CME Fed Fund probabilities indicated an expectation of 175 basis points in rate cuts for 2023, with the first move anticipated in March. The Federal Reserve has now reduced this estimate to 150 basis points. The dovish tone set in late December by Fed Chair Powell has influenced this adjustment, and today’s release of the FOMC meeting minutes might provide further clarity on the market’s interpretation of Powell’s remarks.

EUR/USD and GBP/USD: Impact of Latest Developments

Upcoming Jobs Reports

Today’s session marks the commencement of three crucial U.S. jobs reports. The November JOLTS job openings release at 15:00 U.K. time may show a further decline in job openings, tightening labor market conditions. Thursday will see the release of the December ADP report at 13:15 U.K. time, followed by the latest U.S. NFP report on Friday at 13:30 U.K. time.

Market Reaction and Technical Analysis

Tightening rate expectations on Tuesday led to a surge in U.S. bond yields, boosting the U.S. dollar index (DXY). Although the DXY remains bearish overall, a short consolidation period around current levels is not out of the question.

The recent strength of the U.S. dollar has interrupted the multi-month rally of the GBP/USD pair. After reaching a five-month high of 1.2828 on December 28th, the pair is now targeting 1.2600. A decisive break below the 38.2% Fibonacci retracement level at 1.2628 may lead to a test of 1.2600 before encountering the 200- and 50-day simple moving averages at 1.2532 and 1.2517, respectively.

Retail Trader Sentiment

Data from I.G. retail traders indicates that 57.98% are net-long, with a long-to-short ratio of 1.38 to 1. The increase in net-long positions by 32.60% from yesterday and 30.90% from last week suggests a bearish outlook for GBP/USD prices, according to the contrarian view typically taken towards crowd sentiment.

EUR/USD Uptrend Maintained

EUR/USD has experienced a decline of two significant figures since its late December high print of 1.1193. However, the pair remains in an uptrend for now, with the first level of support observed at the 23.6% Fibonacci retracement of 1.08645. Further support is found near the 50- and 200-day simple moving averages at 1.0849 and 1.0845, respectively.

As the market awaits further economic data and FOMC minutes, investors remain vigilant for potential shifts in the currency landscape, keeping a close eye on developments in the U.S. Dollar Index and its impact on the EUR/USD and GBP/USD pairs.

Stay Updated with the Latest Market News. Visit our YouTube Channel for the Latest Forex Analysis.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Newsletter

Subscribe to ForexPropNews Trading Newsletters

Receive the best-curated content by our editors for the week ahead.

Mini Charts

Related Articles

US Economic Resilience Boosts Dollar: Unemployment Claims Surprise Markets

US unemployment claims fall below forecasts, indicating labor market resilience; robust data...

Market Focus: Analyzing Gold, EUR/USD, and USD/JPY Trends

Gold dropped, EUR/USD declined, and USD/JPY rose, prompting scrutiny of technical indicators...

Gold Surges to New Record High Amid Market Turbulence

Gold reached a new record high, driven by safe-haven trades following the...

Fed’s Barr and Jefferson: High Interest Rates Here to Stay

Federal Reserve Governor Michael Barr reiterated interest rates will stay high until...

Featured educational content

EXPLORE MORE

Featured educational content

New to Forex? Learn to Read Charts Like a Pro

Dive into forex trading basics: chart reading, candlesticks, technical indicators, timeframes, currency pairs. Start your journey to trading success today!

Video: How I Re-Programmed My Mind to be a Consistent Trader (Thanks to The Wolf of Wall Street)

How I Re-Programmed My Mind to be a Killer Trader (Thanks to The Wolf of Wall Street)

Video: This Invisible Trading Indicator Tells you What Day Trade (Not Just Price)

This Invisible Trading Indicator Tells you WHEN to Trade (Not Just Where)

Technical Analysis: Chart Patterns and Indicators for Profitable Investments

Navigate stocks with confidence using chart patterns like Head and Shoulders, indicators such as MACD, and tools like trendlines. Master technical analysis for...

Latest News

US Economic Resilience Boosts Dollar: Unemployment Claims Surprise Markets
Market News

US Economic Resilience Boosts Dollar: Unemployment Claims Surprise Markets

US unemployment claims fall below forecasts, indicating labor market resilience; robust data strengthens the dollar and impacts global currencies and commodities.

Market Focus: Analyzing Gold, EUR/USD, and USD/JPY Trends
Market News

Market Focus: Analyzing Gold, EUR/USD, and USD/JPY Trends

Gold dropped, EUR/USD declined, and USD/JPY rose, prompting scrutiny of technical indicators for future trends.

Copyright © 2023 Forex Prop News. All Rights Reserved.