EURUSD and GBPUSD: Today, we see a break in the recovery

• During the Asian trading session, EURUSD hovered around 1.06500 levels.
• On Wednesday, GBPUSD rose to 1.24500, and then we saw a sharp drop to 1.21500 levels yesterday.

EURUSD chart analysis

During the Asian trading session, EURUSD hovered around 1.06500 levels. A pullback followed this to the 1.06000 support level. Yesterday, the ECB announced the news of an interest rate increase from 2.00% to 2.50% level, which at one point pushed the EURUSD all the way to 1.07350 levels. Since then, the euro has been retreating, and we see the formation of a lower high and the potential for further weakening of the euro. To continue the bearish option, we need a break below the 1.06000 support level.

Then we need to hold down there and, with the next bearish impulse, continue the pullback to the next support. Potential lower targets are 1.05500 and 1.05000 levels. For a bullish option, we need a new positive consolidation and a return above the 1.06500 level. Then we need to hold on to the top in order to initiate the further recovery of the euro. Potential higher targets are 1.07000 and 1.07500 levels.

GBPUSD chart analysis

On Wednesday, GBPUSD rose to 1.24500, and then we saw a sharp drop to 1.21500 levels yesterday. During the Asian trading session, the pound tried to recover and managed to reach the 1.22200 level. Then follows a new pullback and break below the previous low, and the pound falls to the 1.21200 level. Additional support at this level is in the lower trend line.

A break below this support level could extend the pound’s retreat to lower levels. Potential lower targets are 1.20500 and 1.20000 levels. We need a positive consolidation and recovery above the 1.22000 level for a bullish option. This would see GBPUSD form a new low, and we could see a bullish impulse that would trigger another pound recovery. Potential higher targets are 1.22500 and 1.23000 levels.