Two trades to watch EURGBP Nasdaq

EUR/GBP awaits Rishi Sunak’s announcement

EUR/GBP is up after heavy losses in the previous session, despite encouraging data on German GDP and consumer confidence.

Today the pair is slightly higher as attention shifts to UK Chancellor Rishi Sunak who is expected to announce a £10 billion cost of living crisis bailout. .

This could include money off rising energy bills, help with council taxes, and even a one-time tax on rising profits from energy and oil companies.

Any fiscal support from the government will have to be very targeted, otherwise it could add to inflationary pressures.

The Eurozone economic calendar is relatively quiet, with only Italian consumer confidence data due.

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What future for the EURGBP?

EURGBP continues to hold above its multi-month downtrend line, above its 50 and 100 sma, and above its uptrend line from April 18th. The RSI is also above 30, indicating that there may be more upside ahead.

Buyers will look for a move above 0.8510 March high to extend the run up to 0.8590 24th May high and 0.8620 2022 high .

On the other hand, support can be seen at 0.8475, the falling trendline support, 0.8450, the rising trendline support, and 0.8410, the 50 sma.

The Nasdaq awaits US GDP and unemployment insurance claims data.

The tech-focused US index rose sharply yesterday after Fed minutes brought no new surprises and were perhaps seen as less hawkish than expected.

Minutes showed most policymakers favored a 50 basis point rate hike at the June and July meetings. At the May 3-4 meeting, the Fed also felt the US economy was in a good position to meet the necessary hikes, which boosted risk sentiment.

Attention now turns to US GDP data which is expected to show a slight upward revision to -1.3% in the first quarter.

U.S. jobless claims will also be in the spotlight after hitting a ten-week high last week. Further weakness in the labor market could raise fears of a slowdown in the job market.

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What future for the Nasdaq?

The Nasdaq has been trading in a declining channel since early April. Price found support at 11490 2022 low last week and is consolidating around that lower level, capped on the upside by 12060. RSI remains below 30, supporting further declines while remaining out of the oversold territory.

Sellers will need to remove support at 11680 May 12th low to open the door to 11490. A break below here is needed to continue the downtrend.

On the other hand, buyers will be looking for a move above 12060 to expose the 20 SMA. A move above here would be significant as the price has been trading below the 20 sma since early April.

nasdaq chart

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