EUR/GBP may be a mover in the upcoming London session, but will there be enough to break the consolidation pattern?
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at an ascending channel on NZD/USD, so be sure to check that out to see if there is still a potential play!
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 15602.71 +0.23%
FTSE: 7108.00 +0.39%
S&P 500: 4208.12 +0.14%
NASDAQ: 13756.33 +0.14%
US 10-YR: 1.591% -0.024
Bund 10-YR: -0.195% +0.001
UK 10-YR: 0.802% +0.001
JPN 10-YR: 0.076% -0.001
Oil: 68.77 +1.55%
Gold: 1,911.40 +0.33%
Bitcoin: $37,731.50 +4.86%
Ethereum: $2,743.27 +7.79%
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Japan Household spending at 11:30 pm GMT
Australia Home Loans at 1:30 am GMT (Jun. 4)
SNB Jordan speaks at 7:00 am GMT (Jun. 4)
Euro Area Construction PMI at 7:30 am GMT (Jun. 4)
U.K. Construction PMI at 8:30 am GMT (Jun. 4)
Euro Area Retail Sales at 9:00 am GMT (Jun. 4)
ECB President Lagarde speech at 11:00 am GMT (Jun. 4)
What to Watch: EUR/GBP
On the one hour chart above of EUR/GBP, we can see the pair in consolidation mode, forming what could be viewed as a descending triangle in the works. This can be a bearish signal, mainly if the support breaks around the 0.8580 handle, and it would likely turn into a bearish momentum play if the upcoming data from both the Euro area and the U.K. play out favorably for the bears.
On the calendar, we’ve got mid-tier events from both the Eurozone and the U.K. to potentially get EUR/GBP moving, but with forex traders likely to wait on the sidelines ahead of the U.S. Non-Farm Payrolls report, it’s likely that a breakout would occur unless we got a major surprise from either side of the pair.
Given that the longer-term trend is favoring the British pound over the euro at the moment, we’re watching out for a downside break of support on bullish U.K. data and/or positive updates from the pandemic front in the U.K. This would not only likely draw in technical momentum players, but fundamental ones as well.
In the off chance that the Euro area data comes out positive enough to spark a strong euro rally, then a break above the falling ‘highs’ pattern is the behavior to watch before considering a long position in the pair. Keep in mind, though, that with the major price trend and fundamental themes favoring Sterling over euro at the moment, any break higher may be quickly met by longer-term sellers looking to trade at better prices.