The GBP/USD pair strengthened on Thursday even though UK growth slowed to 1.9% from 2.1% as expected. The news saw Sterling rise to 1.4407 as investors had been braced for worse news. The details showed the service sector continued to do heavy lifting. The uptick in the index of services and a horribly weak US durable goods data also helped the pair end on a positive note. The pair clocked a high of 1.4407 before trimming gains to close around 1.4357.
The main event today is the US preliminary GDP estimate release. The detailed discussion of the event has been posted here (Macro Scan).
Technicals – Bullish break likely today
Sterling’s rising bottom formation on the hourly chart shown by the rising trend line is likely to make sure the pair chews through offers around 1.44-1.4410 and move towards 1.45 levels.
On the downside, a break below 1.4333 (support on the hourly chart) could send the pair lower to rising trend line support seen at 1.4278.
However, the odds of a bullish break remain high so long as the pair is above the rising trendline.
EUR/USD Analysis: Stuck at falling trend line resistance
The EUR/USD pair rallied for the fourth straight session on Thursday, but failed to take out the falling trend line resistance (red) shown on the daily chart. The pair clocked a high of 1.0967 before ending the day at 1.0939. The spot remains at the mercy of the equity market sentiment ahead of the US GDP release.
Technicals – Eyes 100-DMA
Euro’s four day rally followed by a drop and rebound from 1.0890 (38.2% of 1.1495-1.0517) coupled with a bullish RSI on the daily indicate the currency pair could be heading towards its 100-DMA at 1.0979.
The odds of a bullish break from the falling trend line (red) remain high so long as the pair is above the rising trend line (blue) support seen currently at 1.08.
A break lower would open doors for a re-test of 1.0710 (Jan 5 low).
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