#EURUSD & #GBPUSD: Weekly Forecast (26 June - 1st July 2023)

EUR/USD: Weekly Forecast 25th June - 1st July

Results in the EUR/USD demonstrated a high and a low last week within twenty-four hours of each other, likely causing speculators to shake their heads in disbelief.

EUR/USD Price Velocity Downwards may have blown through Stop Losses

The rapid decline on early Friday of the EUR/USD was fast enough that some traders may have seen their stop losses not get filled at their expected prices. The velocity of the EUR/USD was fast and trading conditions may have another dark shadow to deal with on Monday’s opening via the developing news from Russia. Traders who do not have active positions may want to wait for a couple of hours before jumping into the EUR/USD tomorrow morning.

When support failed around the 1.09100 ratio on Friday, the EUR/USD skidded below the 1.08500 abruptly, but then reversed upwards. Perhaps Friday’s bad PMI Manufacturing data from Europe will be the ‘final’ admission financial institutions needed to find a ‘bottom’ for the EUR/USD in order to start incrementally looking for upwards price action again. However, risk events do loom this week via the ECB’s banking forum and German data.

Business Climate and Resistance Levels will be Speculative Tools for the EUR/USD

• Traders may be targeting the 1.09000 level as a higher value to begin trading on Monday.
• German Ifo Business Climate results will be published on Monday and the results may prove to be negative, but some speculators may have ‘baked’ a poor outcome into the price of the EUR/USD already.
• ECB President Legarde will be speaking tomorrow and late in the week, her comments will likely be hawkish regarding inflation.

EUR/USD Weekly Outlook:

The speculative price range for EUR/USD is 1.07900 to 1.09750

Caution should be practiced by traders this week as financial institutions deal with the developing news from Russia’s political drama. The EUR/USD could be affected by sentiment regarding the problems on the European continent. While support seemed to prove strong around the 1.08440 mark on Friday, the ability to hit lows so suddenly is a reminder of how volatile the EUR/USD and other Forex pairs can be.

The current support levels near the 1.08800 and 1.08700 levels should be watched on early Monday, if they prove durable this could mean traders have digested the Russian news, and the poor economic numbers from Germany late last week. Trading in the EUR/USD could see additional volatility, however, and traders should have full risk management working because behavioral sentiment could prove extremely nervous if ‘noise’ hits via the Russia situation or surprisingly bad economic results again from Germany.

Traders looking for upside price action in the EUR/USD may be proven correct, but it may take strong emotional fortitude to bet on upwards price action early this week. If the 1.09000 is penetrated and values are sustained above, the EUR/USD could test additional resistance levels and perhaps challenge the 1.09400 to 1.09600 ratios. Traders though should monitor what the ECB and other central banks including the Federal Reserve say about inflation this week in Portugal.

GBP/USD: Weekly Forecast 25th June - 1st July

The GBP/USD went into this weekend near its lows; this after the currency pair experienced two rather strong risk events which caused volatility.

The Bank of England caused a momentary violent reaction for the GBP/USD this past Thursday with its higher than anticipated Official Bank Rate hike. Instead of merely raising borrowing costs by another 0.25%, the BoE turned extremely aggressive and added another 0.50%. The GBP/USD shot to a high of nearly 1.28430 briefly, but the spike did not last long and the Forex pair swiftly returned to a value below 1.28000 again.

UK growth Numbers will come via the Gross Domestic Product Results Late this Week

The 1.27000 level should be watched carefully by traders when the GBP/USD opens for trading on Monday. Before going into the weekend the GBP/USD briefly came within sight of the 1.26900 level, but reversed higher. Traders who remain bullish regarding the GBP/USD based on the notion the U.S. Federal Reserve is going to remain neutral regarding interest rate hikes should not get too comfortable.

The ability of the GBP/USD to launch higher on Thursday was intriguing based on the Bank of England’s surprisingly strong hike, but financial institutions also showed they are plainly dealing with the reality of stubborn inflation, weak growth, and unclear outlooks from global central banks. U.K ‘growth’ numbers will be released this coming Friday and are expected to show recessionary pressures abound. The GBP/USD is within an intriguing trading realm, the 1.27000 could prove to be important in the short term regarding a behavioral sentiment signal.

Additional Risk Events Ahead for GBP/USD Traders Early this Week

• The Russian political saga which erupted yesterday will continue to make news early this week, and could cause volatility for the GBP/USD upon opening on Monday.
• GBP/USD conservative traders should sit on the sideline early this week and see if calmer conditions develop after late last week’s price velocity, which produced choppiness and the potential for additional choppiness to come.
• The ECB banking forum this week will include BoE Governor Andrew Bailey who is scheduled to speak on Wednesday. He will certainly focus on inflation and recessionary data troubling the U.K. and other nations.

GBP/USD Weekly Outlook:

The speculative price range for GBP/USD is 1.26350 to 1.28100

Traders are likely to be cautious early this week as financial institutions seek risk-averse positions which may make the GBP/USD a bit volatile early on. Having broken below the 1.27000 level on Friday shows the GBP/USD remains vulnerable to potential downside price action, but it may also be looked at as an opportunity to buy the currency pair while seeking speculative momentum upwards.

If support near the 1.26900 level remains durable and financial markets turn calmer, the GBP/USD could begin to find price action that starts to test higher realms again. However, traders should not get overly ambitious and be aware that risk events surrounding Russia, and lackluster economic data from the U.K. will have their effects. Conservative trading should be practiced this week by speculators without deep pockets.

The Russia story, the ECB banking forum and GDP numbers from the U.K. will all factor into trading this week and cause volatility. The Russia situation may turn calmer, the ECB banking forum with the Bank of England attending may produce tranquil rhetoric focused on inflation, and growth numbers from the U.K are already anticipated to be lackluster. Meaning the GBP/USD could find a ‘floor’ on which to build off and move higher if risk appetite and outlooks turn slightly optimistic again. Looking for resistance to be challenged near the 1.27400 to 1.27600 would be a good start for GBP/USD bullish speculators. Solid risk management is definitely needed this coming week.

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