Producer prices in the Eurozone decreased a bit lower than economists expected, which limited the growth of the euro in the first half of the day. However, buyers are not giving up and are likely to rely on weak US data and a breakthrough in monthly highs. The British pound was much luckier: a breakout of significant resistance, coinciding with March highs, led to a new surge in EUR/USD which updated fairly recent local levels. It is difficult to say the US dollar will gain strength in the second half of the day after the release of JOLTs job openings and labor turnover from the US Bureau of Labor Statistics and changes in factory orders. However, such data is of secondary importance to the market. FOMC member Lisa D. Cook's speech may even revive demand for risky assets if she suddenly speaks in defence of the banking sector and a softer approach to the central bank's future monetary policy.
EURUSD
Buy signals
Scenario #1: Today, buying the euro is possible after the price reaches around 1.0938 (the green line on the chart) with an upward target at the level of 1.0970. At the point of 1.0970, it is recommended to exit the market and also to sell the euro in the opposite direction, reckoning a movement of 30-35 points from the entry point. It is important to make sure before buying that the MACD indicator is above the zero mark and only starting to rise from it.
Scenario #2: Today, buying the euro is also possible in the case of two consecutive tests of the price of 1.0914 when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and lead to an upward reversal of the instrument. EUR/USD is expected to grow to the opposite levels of 1.0938 and 1.0970.
Sell signals
Scenario #1: Another option for selling the euro is to go short after the price reaches the level of 1.0914 (the red line on the chart). The target will be the level of 1.0883, where it is recommended to exit the market and buy the euro immediately in the opposite direction (bearing in a move of 20-25 points in the opposite direction from that level). It is important to check before selling whether the MACD indicator is below the zero mark and only starting to fall from it.
Scenario #2: We could also sell the euro today on the condition of two consecutive tests of 1.0938 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a reversal of the market downwards. EUR/USD could decline to the opposite levels of 1.0914 and 1.0883.
GBPUSD
Buy signals
Scenario #1: Buying the pound sterling today is possible when the entry point is reached around 1.2534 (the green line on the chart), aiming for the upward target at 1.2576 (the thicker green line on the chart). At the point of 1.2576, it is recommended to exit long positions and open short ones in the opposite direction, relying on a move of 30-35 points in the opposite direction from that level. Please make sure before buying that the MACD indicator is above the zero mark and only starting to rise from it.
Scenario #2: The buy option for GBP/USD today is also possible after two consecutive tests of the level of 1.2495 when the MACD indicator is in the oversold area. This will limit the downward potential of the pair and encourage an upward reversal of the market. The instrument could rise to the opposite levels of 1.2534 and 1.2576.
Sell signals
Scenario #1: Selling the pound sterling today is possible only after updating the level of 1.2495 (the red line on the chart), which will push GBP/USD sharply down. The key target for sellers will be the level of 1.2461, where it is recommended to exit short positions and immediately open long ones in the opposite direction, reckoning a move of 20-25 points in the opposite direction from that level. It is important to make sure before selling that the MACD indicator is below the zero mark and only starting its decline from it.
Scenario #2: Alternatively, we could go short on GBP/USD today in case of two consecutive tests of the price of 1.2534 when the MACD indicator is in the overbought area. This will limit the upward potential of the pair and lead to a downward reversal of the market. We could expect a decrease to the opposite levels of 1.2495 and 1.2461.