EURUSD and GBPUSD no strength at the beginning of the week

Looking at the chart on the daily time frame, we see that EURUSD is still under pressure and that we will probably go down again to the previous support at 1.17500. We are now at the current 1.17850. Our previous low was at 1.16640, and it is possible that if this pullback continues, we will visit this support from  17 August. For the bullish scenario, we need support in the 20-day and 50-day moving average with a 23.6% Fibonacci level with the goal of starting to climb to the previous high in the zone of 38.2% Fibonacci level at 1.19000. A break above would take us to 50.0% Fibonacci levels at 1.19650, and here we encounter the next resistance in the form of a 200-day moving average.

GBPUSD chart analysis

Looking at the chart on the daily time frame, we see that the  GBPUSD pair is still moving sideways in consolidation around the 200-day moving average. Friday was a day with great potential, but at the end of the American session, the dollar strengthened, and the situation turned around and directed the GBPUSD pair to the bearish side. Today, the current consolidation is about 1,38250 and 38.2% Fibonacci levels. For the bearish trend to continue, we need a drop below the minimum below 1.38000 and below the 50-day moving average. We have a smaller jump in the 20-day moving average in the zone of 1,37500. For the bullish option, we need growth above 1,38500, with the next resistance in the area at 0.78% lower Fibonacci level at 1.39000, and our main target is the previous high at 1.40000 at 61.8% higher Fibonacci level. This week is full of a lot of important news for these two currencies, so we can expect bigger oscillations on the chart.

Market overview

German wholesale prices have been increasing at the biggest pace since 1974 August amid a sharp the prices rise of raw materials and semi-finished products, Destatis reported on Monday.

Wholesale prices rose 12.3 percent year-on-year, after July’s 11.3 percent July.

This was the strongest growth since October 1974, when prices rose 13.2 percent after the first oil crisis.

On a monthly basis, wholesale price inflation slowed to 0.5 percent in August from 1.1 percent in July.

There was a sharp rise in the wholesale prices of many raw materials and semi-finished products. Destatis also cited a very low base in recent months regarding the corona crisis due to higher wholesale price inflation.

In August, wholesale prices of ores, metals, and semi-finished metal products rose by 63.4 percent per year. Solid fuels and mineral oil products rose 35.5 percent.

 British Prime Minister Boris Johnson will unveil his plans to manage the COVID-19 pandemic in the winter months on Tuesday, announcing a decision to lift the introduction of vaccine passports and steps to lift some emergency powers.

Under attack by some from his ruling Conservative Party for raising taxes to resolve the health and social care crisis, Johnson looks set to try to reassure those critics by giving up plans to introduce passports despite a growing number of coronavirus cases. 

Speaking to broadcasters, Health Minister Sajid Javid said he did not anticipate additional delays and that vaccine passports would not be introduced in England. The government would instead depend on vaccines and public defense testing.

“Now that we are entering the fall and winter … this week, the prime minister will outline our plans to fight COVID in the next few months and thus make it clear that our vaccine program is working,” Javid told Sky News.