GBP/USD – UK Q4 GDP to set the tone for further upside

EUR/USD - Could rise to 1.1430

The EUR/USD pair is hovering close to the hourly 200-MA located at 1.1367 levels. The shared currency remains well supported after the European Central Bank (ECB) President on Wednesday said he saw the first signs of confidence in the economy as stimulus starts to have a positive impact on growth. With Greece’s debt crisis no longer an immediate risk and “patient” approach from the Federal Reserve, the EUR/USD pair could witness a short covering rally to 1.15 levels.

A fresh demand for Euros can be seen once the pair rises above the 38.2% Fib retracement level of the minor uptrend from 1.1096 to 1.1532 located at 1.1368. With the hourly RSI bullish at 55.77, the pair could rise to 1.1430 once it moves above 1.1368 levels. A better-than-expected German unemployment change data could help the pair rise above 1.1368 levels. On the flip side, failure to sustain above 1.1368 could see the pair re-test 50% retracement level at 1.1315 levels.

GBP/USD – UK Q4 GDP to set the tone for further upside

The GBP/USD pair edged higher in the Asian session on Wednesday, trading at the technical resistance at 1.5540 levels (Dec. 8 low). The pair broke above 1.55 levels as short-term relative monetary policy expectations remain in favor of Pound. Carney and his team are increasingly favoring an interest rate hike as the next likely move, while Fed’s Yellen said policymakers are in no rush to raise interest rates in the next couple of meetings.

The daily chart shows, the pair is moving in an upward channel with resistance at 1.5570 and support at 1.5378. The UK Q4 GDP is seen unchanged at 2.7%. A test of 1.5570 could mean the pair has priced-in the expected GDP print in advance. Thus, we could see the pair drop to 1.5520 if the GDP data prints in line with the expectations. In case, the pair remains stuck around 1.5540, an unchanged GDP print could see the pair test 1.5570 levels. However, it would take a better-than-expected GDP to see the pair trade comfortably above the channel resistance at 1.5570. Meanwhile, a weaker-than-expected print, though a low possibility, could push the pair down to 1.5477 levels.

USD/JPY – Rangebound trading continues

The USD/JPY trades around 119.00 levels as Fed chairwoman Janet Yellen provided no fresh insight on U.S. monetary policy in day 2 of her testimony. Despite weakness against other major currencies, the USD has been resilient against the Yen. The pair could see notable volatility today with the release of consumer prices, durable goods and jobless claims data in the US. Till then, the pair is likely to witness lackluster trading.

The pair could drop to the 50-DMA located at 118.50, if it fails to sustain gains above 118.89 levels (150% Fib extension of move from 100.81-110.06-105.20). On the other hand, a move towards 119.40 cannot be ruled out if the pair manages to sustain above 118.89. However, given the weakness in the US Treasury yields, the downside move in the USD/JPY pair appears more likely. A weak European data could trigger more losses in the 10-year Treasury yield in the US, thereby pushing the USD/JPY pair towards 118.50 levels.