Bullish Consolidation of EURUSD and GBPUSD – May 11

• Since the beginning of the Asian session, the euro has been in a bullish trend.
• During the Asian session, the British pound strengthened against the dollar.
• Germany’s consumer price inflation reached a record high in April.
• Japan’s leading index rose in March.

EURUSD chart analysis

Since the beginning of the Asian session, the euro has been in a bullish trend. The day started at the 1.05296 level; as time went on, the pair started bullish consolidation, climbing to the 1.05620 level. The current progress of the euro against the dollar is 0.30% since the beginning of the trading day. Our first resistance is in zone 1.05600-1.05800. We need a break above that zone to try to endanger the 1.06000 level. Our first crucial target is the 1.06420 level.

Contrary scenario, we need a new bearish consolidation and pullback EURUSD to the previous support at the 1.05245 level. If the pair stays longer at that level, then we can expect increased bearish pressure and a potential break below. We are looking for lower support in the zone around 1.05000 levels. The following potential supports is 1.04815, then 1.04693 level, this year low.

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GBPUSD chart analysis

During the Asian session, the British pound strengthened against the dollar. The impatience of currency traders before today’s announcement of inflation pushes some of them to “bet” on the slowdown in inflation in the United States, thus weakening the dollar. The ten-year yield on US Treasury bonds jumped 3% late last week, giving the dollar an extra boost. Sentiment in the financial market is very bad, and that also affects the US dollar. The pound was exchanged for 1.23585 dollars, representing the British currency’s strengthening by 0.38% since the beginning of trading tonight. Before the start of the US session, the latest figures on price inflation in the US for April are expected.

To continue the bullish trend, we need a break above 1.24000 levels. After that, we can expect pairs of sequels to the following bullish targets 1.24500, 1.25000, 1.25750 and 1.26360. For the bearish option, we need a withdrawal below 1.23000 levels. After that, we will endanger the 1,22595 level, this year’s lower low, which would lead to a potential break below and the formation of a new minimum.

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Market overview

Rising inflation in Germany

Germany’s consumer price inflation reached a record high in April; final Destatis data showed on Wednesday.

Consumer price inflation rose to 7.4 % in April from 7.3 % in March. The inflation rate reached its highest level in history since 1991, according to an estimate released on April 28.

Destatis cited energy price developments as one of the main causes of record growth in total prices. The above-average increase in food prices has also raised consumer prices. The statistical office said the impact of the war in Ukraine is becoming increasingly visible.

Japan’s leading index

Japan’s leading index rose in March after falling in the previous month, preliminary data from the cabinet showed on Wednesday.

The leading index, which measures future economic activity, rose to 101.0 in March from 100.1 in February.