EURUSD and GBPUSD: Better Chance of Recovery

• Pair EURUSD tried to start a recovery yesterday and partially succeeded as it climbed to the 0.97750 level.
• During the Asian trading session, the pound manages to find support at the 1.09000 level and start a bullish recovery.
• The UK economy unexpectedly fell in August due to weak services and industrial production.

EURUSD chart analysis

Pair EURUSD tried to start a recovery yesterday and partially succeeded as it climbed to the 0.97750 level. He did not stay there for long, and a new retreat followed to the start position at 0.97000. During the Asian trading session, the euro managed to stay at that level, and now it has a chance to create a new bullish impulse. We need a positive consolidation and another test of the 0.97700 level. Then, we must stay there and try the euro’s recovery with a new bullish impulse. Potential higher targets are 0.98000 and 0.98500 levels. We need a negative consolidation and a drop to the 0.96500 support level for a bearish option. Thus, the euro would form a new October minimum and confirm the continuation of the bearish option. Potential lower targets are the 0.96000 and 0.95500 support levels.

GBPUSD chart analysis

During the Asian trading session, the pound manages to find support at the 1.09000 level and start a bullish recovery. The pound is now at 1.10500, which is a 0.68% increase since the market opened last night against the dollar. For a bullish option, we need a continuation of today’s positive consolidation and a move above 1.11000. This would form today’s higher high, and the pound would have a better chance of recovery. A potential higher target is the 1.12000 level. We need a negative consolidation and a return to the 1.09000 support level for a bearish option. A longer hold in that zone would increase the bearish pressure, and a drop below could occur, and the pound would continue to retreat. Potential lower targets are 1.08000 and 1.07000 levels.

Market Overview

The UK economy unexpectedly fell in August due to weak services and industrial production, and the Gross domestic product decreased by 0.3% on a monthly basis. On an annual basis, GDP grew more slowly than expected, by just 2.0%. Industrial production fell 1.8%, following a 1.1% decline in July.