Growth numbers from the second quarter in the UK were not revised. The pound weakened further after the report. The GBP/USD dropped to 1.5363 and remains below 1.5400 under pressure.
After being rejected from above 1.5700 and making a sharp reversal, the pair broke an uptrend line and dropped back to the previous trading range. Now testing a relevant support that capped the decline on July and worked as a resistance in the past. A break of the 1.5350 area should open the doors for further losses, with targets at 1.5300 and then around 1.5200. June lows should offer support.
The area around 1.5360 seems like a strong support from where a bounce to the upside is possible. So far the bounce from the lows has been limited. If it gains momentum it could rise to 1.5450/60; only above it could remove some of the bearish momentum and would open the doors toward 1.5500.
The pair is about to post the first close under the weekly 20-SMA; the negative signal could be offset if it manages to end above 1.5350. But anyway the outlook remains bearish after the reversal and the break of an uptrend line. A close on top of 1.5500 would remove strength to the US dollar.
Recommended Content
Editors’ Picks
AUD/USD rises to two-day high ahead of Australian CPI
The Aussie Dollar recorded back-to-back positive days against the US Dollar and climbed more than 0.59% on Tuesday, as the US April S&P PMIs were weaker than expected. That spurred speculations that the Federal Reserve could put rate cuts back on the table. The AUD/USD trades at 0.6488 as Wednesday’s Asian session begins.
EUR/USD holds above 1.0700 on weaker US Dollar, upbeat Eurozone PMI
EUR/USD holds above the 1.0700 psychological barrier during the early Asian session on Wednesday. The weaker-than-expected US PMI data for April drags the Greenback lower and creates a tailwind for the pair.
Gold price cautious despite weaker US Dollar and falling US yields
Gold retreats modestly after failing to sustain gains despite fall in US Treasury yields, weaker US Dollar. XAU/USD struggles to capitalize following release of weaker-than-expected S&P Global PMIs, fueling speculation about potential Fed rate cuts.
Ethereum ETF issuers not giving up fight, expert says as Grayscale files S3 prospectus
Ethereum exchange-traded funds theme gained steam after the landmark approval of multiple BTC ETFs in January. However, the campaign for approval of this investment alternative continues, with evidence of ongoing back and forth between prospective issuers and the US SEC.
US versus the Eurozone: Inflation divergence causes monetary desynchronization
Historically there is a very close correlation between changes in US Treasury yields and German Bund yields. This is relevant at the current juncture, considering that the recent hawkish twist in the tone of the Fed might continue to push US long-term interest rates higher and put upward pressure on bond yields in the Eurozone.