Daily Asia-London Sessions Watchlist: EUR/GBP

Euro price action may pick up in the upcoming London session with economic catalysts on the calendar and European traders coming back from holiday. That makes the slow grind higher in EUR/GBP one to watch to see if the recent bullish lean moves faster.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a descending triangle formation on GBP/CHF, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Fresh Market Headlines & Economic Data:

Dow climbs 250 points to start the week, tech shares and reopening trades gain

Fed’s Brainard Breaks Down CBDC Policy Considerations, Sees Price Pressures Waning in the Future

Billionaire Ray Dalio says he owns bitcoin, and its ‘greatest risk is its success’

Oil prices up rise on potential hitch in Iran talks

South Korea to Kick Off Digital Currency Experiment This Summer

Cryptocurrencies rebound from Sunday sell-off, bitcoin still down 40% from high

Bank of England plays down risk of runaway U.K. inflation

US issues do-not-travel advisory for Japan, which hosts the Olympics in 2 months

Upcoming Potential Catalysts on the Economic Calendar

Bank of Japan Core CPI at 5:00 am GMT (May 25)
Germany GDP at 6:00 am GMT (May 25)
U.K. Public Sector Net Borrowing at 6:00 am GMT (May 25)
Spain PPI at 7:00 am GMT (May 25)
Germany Ifo Business Climate at 8:00 am GMT (May 25)
U.K. CBI Distributive Trades at 10:00 am GMT (May 25)

What to Watch: EUR/GBP

On the one hour chart of EUR/GBP above, we can see the market moving in a range through out mid-May, but with a slight bullish lean thanks to strong support just under the 0.8600 and higher ‘highs’ being made.

Currently, the pair just took a dip after another retesting of the minor resistance area around the 0.8640 handle, which is starting to already fade ahead of upcoming data from Europe. Could the resistance area break soon?

Well, the upcoming data from Europe and the U.K. is rated low to mid-tier events, so the odds of one of those events be the catalysts for a break is pretty low. But if we see an all-around positive update from Europe, it might be enough to lead the euro higher, especially if we see disappointing U.K. data.

We’d consider a break above the resistance area around 0.8640 a potential short-term bullish setup in that scenario as it may draw in technical buyers. Also, if the pair dips before the London session, bullish reversal patterns at the higher ‘lows’ pattern down to 0.8590 may draw in buyers as well.

Of course, if we get disappointing European data, especially from the German Ifo Business sentiment update, the euro could see a run of temporary selling in the short-term. A break below the rising lows pattern could potentially draw technical sellers, but we’d likely have to see U.K. data surprise positively to see any kind of chance for EUR/GBP to make a sustained downside break and reach the 0.8590 support area.