The GBP/USD pair rose to an intraday high of 1.5068 levels on Thursday on the back of a sharp fall in the new home sales in the US and due to weakness in the US manufacturing data. The British Pound gained despite the surprising drop in the UK retail sales in March, which means the rise was mainly due to broad based weakness in the USD. I still believe that the rise in the pair could be utilized to initiate fresh sell ahead of the elections in the UK. The pair could rise to its 100-DMA at 1.5094 today on signs of Greek reaching a deal. Further gains to 1.5140-1.5173 could be seen in case the US durable goods data sees another monthly disappointment. However, the rise could be utilized to sell as the GBP is likely to be offered from the midweek or later part of the next week. In 2010, the pair dropped 300 pips. The high probability of a hung parliament is likely to weigh over British Pound next week.
The daily chart shows, the pair failed to sustain gains for the second consecutive session above 1.5057 (50% Fib retracement of 1.5550-1.4564). A break above 1.5057 on the hourly/4-hourly charts could open doors for a test of 100-DMA at 1.5094-1.51. On the other hand, the pair could drop to 1.4994 (5-DMA) in case it fails to break above 1.5057. However, a daily close above 1.5 for two consecutive sessions is likely to keep bears at bay. Above 1.51, the pair could extend gains to 1.5173 (61.8% Fib retracement of 1.5550-1.4564). Such gains, however, are likely on a weaker-than-expected US durable goods data.
Moreover, a break above 1.51 would be a breach of the inverted head and shoulder formation seen on the 4-hour chart.
EUR/USD Analysis: EUR could drop if the Greek ‘Can’ is kicked down the road
The EUR/USD pair has been rejected at the 50-DMA located at 1.0817 ahead of the Eurogroup meeting in Riga. Amid all the confusing and contradicting statements from the EU as well as Greek officials, the pair rose to a high of 1.0843 levels on Thursday. The weak US data is partly responsible for the rise in the EUR/USD pair, while part of the gains have been triggered by the expectation that the can would be kicked down the road at the Eurogroup meeting. Hence, the near-term top at 1.0850 is likely to remain intact in case Greece is allotted a new deadline. Meanwhile, a breakthrough deal would be a major surprise, which could push the pair higher to 1.10 levels. On the other hand, the pair could begin its journey back to 1.05 in case no progress is made over the issue.
On the daily charts, we see the pair has been rejected at the 50-DMA located at 1.0817 levels in the Asian session. The daily RSI is trading above mid line, which indicates further room for the upside. A break above 1.0850 (latest cyclical top) could push the pair higher to 1.0869 (38.2% Fib retracement of 1.1532-1.0461). On the other hand, the immediate losses appear capped around 1.0764 (5-DMA) and 1.0712 (23.6% Fib retracement of 1.1532-1.0461).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD climbs to 10-day highs above 1.0700
EUR/USD gained traction and rose to its highest level in over a week above 1.0700 in the American session on Tuesday. The renewed US Dollar weakness following the disappointing PMI data helps the pair stretch higher.
GBP/USD extends recovery beyond 1.2400 on broad USD weakness
GBP/USD gathered bullish momentum and extended its daily rebound toward 1.2450 in the second half of the day. The US Dollar came under heavy selling pressure after weaker-than-forecast PMI data and fueled the pair's rally.
Gold struggles around $2,325 despite broad US Dollar’s weakness
Gold reversed its direction and rose to the $2,320 area, erasing a large portion of its daily losses in the process. The benchmark 10-year US Treasury bond yield stays in the red below 4.6% following the weak US PMI data and supports XAU/USD.
Here’s why Ondo price hit new ATH amid bearish market outlook Premium
Ondo price shows no signs of slowing down after setting up an all-time high (ATH) at $1.05 on March 31. This development is likely to be followed by a correction and ATH but not necessarily in that order.
Germany’s economic come back
Germany is the sick man of Europe no more. Thanks to its service sector, it now appears that it will exit recession, and the economic future could be bright. The PMI data for April surprised on the upside for Germany, led by the service sector.