GBP/USD Analysis: Weakness to persist, could drop to 1.4687

GBP/USD Analysis: Weakness to persist, could drop to 1.4687

The GBP/USD pair almost erased its entire gains witnessed on Wednesday as it finished lower at 1.4758 levels. The USD made a comeback,while Pound was also hit by Bank of England economist Haldane’s rate cut comments. Haldane, in his speech, said that the BOE could be forced to cut rates to zero in order to tackle the deflationary forces. His comments pushed the UK 10-year Gilt yield to 1.516%. With no major data due out of the US or UK today, the pair is likely to focus once again on the divergent monetary policy expectations from the BOE and the US Fed. Consequently, the GBP/USD pair could re-test the previous session low of 1.4687.

On the hourly chart, the pair could be seen struggling to rise above 1.4770-1.4775 since the Asians session. The daily, hourly, and the 4-hour RSI stays bearish, which indicates room for another sell-off in the pair to 1.4687 levels. A fresh demand for Pounds can be anticipated around 1.4687. The immediate upside in the pair appears capped at the 5-DMA currently located at 1.4810 levels.

EUR/USD Forecast: Could drop to 1.0617 on Greek concerns

The EUR/USD pair fell to 1.0667 in the previous session, although the pair manages to sustain above the 5-DMA and the 10-DMA. In the absence of a major market moving data out of the EU or US today, the pair is likely to take cues from the Greek concerns. The EU chief said today that the time is running out for Greece to overcome a standoff over aid and that Greece could run out of money as soon as this month as debt payments and monthly salaries and pensions come due. Greece, meanwhile, said it will fulfill debt obligations that are due Friday, and an EU official said the cash-strapped government may have enough money to tide it over until April. The fresh signs of tensions between Greece and its creditors could push the EUR/USD down to 1.0617 levels.

The Hourly chart shows, the pair is currently trading near the 61.8% Fib retracement level of the short uptrend – 1.0461 to 1.1033 – located at 1.0679 levels. Moreover, the pair has struggled to extend gains above 1.0680-1.0690 since the early Asian session today. On the 4-hour charts, the three positive candles have not been able to recover the losses suffered in the previous red candle. Furthermore, the daily RSI still remains bearish. Thus, another failure to rise and sustain gains above the same at the European opening bell, could lead to a fresh sell-off towards 1.0617 levels. On the other hand, a break above 1.0710 levels could push the pair higher to 1.0746 levels.

USD/JPY Forecast: Rejected at 5-DMA, could drop to 120.10

The USD/JPY pair rose in the previous session, although gains were capped at the 5-DMA. The Yen came under pressure as the 10-year Treasury yield in the US recovered from 1.899% to 1.989%. The upbeat weekly jobless claims data in the US was countered by the rise in the US current account deficit in the fourth quarter. The Bank of Japan governor Kuroda’s statements failed to have any impact in the pair. Given, the absence of a major market moving data in the US, the pair is likely to take cues from the movement in the Treasury yields.

On the daily charts, the pair was rejected at the 5-DMA located at 120.81, post which it fell to the current level of 120.66. The pair has also dipped below the hourly 50-MA located at 120.69. The hourly as well as the 4-hour RSI is bearish. Thus, the pair could extend the drop to 120.10 levels. Meanwhile, a rise above 121.00 could push the pair higher to 121.55 levels.