EURUSD and GBPUSD started the day in profit

EURUSD chart analysis

During the Asian session, the euro consolidated against the dollar after a large withdrawal from yesterday. The yield on ten-year US Treasury bonds is at a two-year high, close to 1.9%, and the “risk-off” mood prevails, which keeps the dollar high on the radar of currency traders. Tensions between Russia and Ukraine, bombings of Houthi outlaws in the UAE, sale of shares yesterday in the USA and today in Asia, all this is pushing investors towards a “safe haven” dollar currency by 0.17% from the start of trading tonight.

Bullish scenario:

• We need a new positive consolidation from the current level and support at 1.13000.
• At this level, we get the support of MA20 and MA50 moving averages.
• After that, we can expect the pair to continue further towards last week’s high at 1.14800.
• We can expect the first major resistance at that level because we are close to 1.150000 psychological level.
• An additional resistance at that level is the upper trend line.

Bearish scenario:

• We need a negative consolidation that would make a marriage below the bottom trend line that would strengthen bearish pessimism.
• We can say that the level at 1.13000 is important to us, and if we see a break below, we will probably visit the previous support zone around 1.12000.
• A further break below opens up new minimums this year.

GBPUSD chart analysis

During Asian trade, the British pound consolidated earlier losses against the dollar. Investor sentiment is weak, the “risk-off” mood prevails, which keeps the dollar high on the radar of currency traders. On the other hand, it was announced this morning that the inflation rate in the UK has further increased (from 5.1% to 5.4%), which supports the pound. Namely, that undermines the belief that the Bank of England could raise the reference interest rate faster and more aggressively at its meeting in early February. Currently, the pound is exchanged for 1.36389 dollars, which is weakening the British currency by 0.33% since the beginning of trading tonight.

Bullish scenario:

• We can see that the pair stopped at 1.35720 yesterday and that we now have a recovery at the current 1.36393.
• We need further positive consolidation that, with the help of the MA20 moving average, would push GBPUSD up again to the MA200 moving average in the 1.37000 zones.
• A break above 1.37000 would open up space for us to try to attack the zone around 1.38000, and we were there for the last time in October last year.

Bearish scenario:

• We need a continuation of the negative consolidation that has lowered us again below 1.36000.
• Our first potential support is at 1.35000 with the MA20 moving average.
• Then, the next one is in the zone around 1.34000, where the MA50 moving average is waiting for us.
• And if this zone doesn’t hold up, let’s go down to last year’s support zone, around 1.32000.

Market overview

German news

Consumer price inflation in Germany in 2021 reached its highest level in nearly 30 years, mainly due to high monthly inflation rates in the second half of the previous year, Destatis said on Wednesday. Consumer prices rose 3.1 percent in 2021 after a 0.5 percent rise in 2020. A higher year-on-year price growth rate than 2021 was last measured in 1993 when prices rose 4.5 percent. Adjusted EU inflation slowed to 5.7 percent in December, according to estimates, from 6 percent in November.

British news

Consumer price inflation in the UK revved more than expected in December to its highest level since 1997, data from the Office for National Statistics revealed on Wednesday. Consumer price inflation rose to 5.4 percent in December from 5.1 percent in November. The forecast was that the rate would increase to 5.2 percent. On a monthly basis, consumer prices rose 0.5 percent after increasing 0.7 percent in November. The forecast was to reduce inflation to 0.3 percent.