Euro bounced off the support area that held the pair since late April. Currency gained 50 pips, being one of the few pairs that moved decisively throughout session. This week the Euro-area calendar is free of top-tier releases, something that may affect the pair's momentum. Pound lost more than 600 pips over the last three days of trading as the market is penalizing the unstable U.K. government. This caused the pound to be the worst performer over the last period.
Technical outlook:
EURO chart pattern is expected to be on a sideways note for the day. Currency is expected to trade in the range of 1.3850-1.4060 levels. Daily Momentum and stochastic are seen trending down and Euro is trading below the moving average only crossover can confirm the trend. Parabolic is holding its bearish outlook. Good support is seen at 1.3820 break of which will see 1.3750 and key resistance is seen at1.4120 levels .
GBP chart pattern is expected to form a bearish crow pattern and trade in the range of 1.5830-1.6020 levels for the day. Momentum is seen trending down and the Relative strength index is also trending down hinting towards the possibility of downside correction to 1.5750 .Key resistance for the currency is seen at 1.6050 levels.
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