GBPUSD

The upward revision of the UK Q4 GDP helped lift the GBP/USD pair above 1.48 levels on Tuesday. The pair has inched higher today to 1.4863 ahead of the UK final PMI manufacturing report for March. At the moment, the gains appear capped at the 10-DMA located at 1.4870. A better-than-expected PMI figure could see the pair re-test 1.49 levels. However, a weak data could push the pair back to 1.4749 levels. In the meantime, the UK election uncertainty could continue to weigh over the British Pound.

On the charts, the pair bounced from 1.4820, which is the 61.8% Fib retracement of the post Fed move from 1.4633-1.5122. The upward momentum in the Asian session also saw the pair rise above the 23.6% Fib retracement of the down trend from 1.5550-1.4633 located at 1.4849. Given the failure at 1.4870 (10-DMA) and at 1.4863 (hourly 200-MA), the pair could drop below 1.4849, and extend losses to 1.48 levels ahead of the PMI data. The losses could be extended further to 1.4749 (76.4% Fib retracement) in case we do not see a positive surprise in the UK PMI report.


EUR/USD Forecast: could be sold on rallies, eyes 1.0686

EURUSD

The EUR/USD pair weakened to 1.0738 levels on Tuesday as Greek concerns overshadowed the drop in the German unemployment rate to record lows. The EUR was also hurt by a decline in the core inflation reported in the preliminary Eurozone CPI report for March. The pair has advanced to 1.0770 levels in the Asian session today. We have the final manufacturing PMI reports across the Eurozone due for release today. The upbeat PMI prints are unlikely to result in a significant appreciation in the EUR. However, a negative surprise could push the EUR/USD pair down to 1.0685.

On the charts, we see the pair trading a few pips above 1.0755, which is the 50% Fib retracement of the move from 1.0461 to 1.1050. The pair was rejected by the hourly 50-MA at 1.0790 earlier today. Furthermore, we see a bearish 5-DMA and a 10-DMA crossover, coupled with a bearish daily RSI. Thus, we could see the pair drop below 1.0755 levels. A re-test of 5-DMA at 1.0823 could be seen in the case of stellar PMI reports. However, the rallies could be utilized to sell as Greek concerns are still very much intact. Also, the technical outlook stays bearish so long as the pair trades below 1.0823. Overall, the outlook stays in favor of a dip to 1.0686.

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