European currencies have dominated in today's trading as the EURUSD was crowned king of volatility amongst the major pairs, when North American traders came into the fray, while at the same time the GBPUSD continued to take a beating in the currency markets. It's somewhat remarkable to have two currencies intertwined yet going in opposite directions based on the current political events, but for traders it's just another day in the field.
The EURUSD continues to be a big favourite of mine and despite the pullback we saw on Friday it has failed to stimulate the USD bulls to come back into the marketplace. Currently, the Trump effect has faded and despite some outlets of media saying otherwise there seems to be movements to try and investigate further the Russian influence in the US elections. All of this is weighing down on the markets which believed that a Trump administration would be pro-business. Additionally, the FED continues to send mixed messages unless we see inflation lifting and has even cut back growth forecasts going into 2018 and 2019. US PPI and CPI will be a major focus this week and I would expect the markets to look gleefully on those figures in the long run, but at present the focus is very much on dollar selling based of the current market information and the EURUSD has been one of the largest benefactors.
Chart wise the EURUSD is still in its bullish trend. Fridays sell-off was on the back of some positive fundamental news, but it has not managed to carry through into the new week thus far. Support was quick to hold any downward momentum at 1.1719 and continues to look like a strong level, this was further reinforced by the 20 day moving average warding off the dollars bulls in the EURUSD. So far however momentum has stalled as trading has been light with the Monday opening, and it's held up at resistance at 1.1799, but not before testing it today. There is potential to slide further down, but also plenty of potential to climb higher on the back of the US political mess. If we do see a strong push through resistance I would anticipate further climbing to 1.1915 in the current market environment.
The GBPUSD has been the other mover today after recently looking stronger against the USD, it has struggled to gain any momentum in the last three trading days and looks to be sliding back down the charts again. Support levels will be key here and 1.2972 is looking like a key level to be focused on as well as 1.2843 to see if this is really a strong sell off. If we do see a big jump in the charts for the GBPUSD you can be sure that resistance at 1.3224 will be the target, and we could potentially see a double top if the bears look to strike there again.
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