GBPUSD

The GBP/USD pair extended the recovery from the low of 1.4895 to 1.5240 levels on Friday as the USD was offered across the board ahead of the weekend. The US advance retail sales figure printed lower than estimates, but clocked 4-month high. However, the data failed to keep the USD bid.

Risk aversion, commodity sell-off raising doubts over Fed liftoff

Some amount of worry appears to have crept into the Markets that the ongoing risk aversion in the markets and the sell-off in oil and other commodities may force the Fed to delay its liftoff. However, the broad consensus is the liftoff is a done deal. But, the rout in commodities and risk aversion could lead to a slower-than-expected takeoff - a move less than 25bps. This may be one of the reasons why the 10-yr treasury yield fell 10bps last week and the USD was offered on Friday.

The data docket in the UK and US is empty today. The USD may find bids today in Europe and US as traders adjust positions in anticipation of the liftoff this Wednesday.

Technicals – Bearish below 1.5185

The intraday bias stays neutral, so long as the pair remains above 1.5185 (23.6% of July 2014-April 2015 plunge). Sterling’s recovery from the bottom of 1.4895 I still well below 1.5335 (Nov 19 high and near-term top), and thus the odds remain in favour of the continuation of the down move from the high of 1.5930 seen in June. On intraday basis, a break below 1.5185 could see the pair test the trend line (drawn from Nov 2 high-Nov 19 high) support at 1.5125-1.5130.


EUR/USD Analysis: Eyes 38.2% Fibo support

EURUSD

The EUR/USD pair rose to an intraday high of 1.1031 on the back of the broad based USD weakness in the NY session on Friday, but trimmed gains to end the week at 1.0985 levels. The overcrowded long USD trade heading into the decision witnessed considerable unwinding since the ECB meeting. This means the traders could once again enter fresh USD longs in anticipation of the rate hike.

Technicals – Bearish intraday bias

Euro’s repeated failure to rise above 200-MA at 1.1030 and sustain above the rising trend line (drawn from the March low-April low) and 1.1006 (50% of 1.1495-1.0517) indicates the currency is likely to revisit the strong support at 1.0890 (38.2% of 1.1495-1.0517). The 50-DMA at 1.0943 could offer support to the pair, however, another failed attempt to take out 1.10 could trigger a sell-off that would take 50-DMA support out of action and open doors for a drop to 1.0890. The EUR bulls could come-in strong only above its 200-DMA at 1.1030.

-------
What will 2016 bring to the Forex traders? Attend our event, Forex Forecast 2016 - The Panel with Ashraf Laidi, Valeria Bednarik, Boris Schlossberg, Adam Button, Ivan Delgado and Dale Pinkert. Register for the live event on Dec. 18th and get the recording too.
-------

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


Recommended Content

Editors’ Picks

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD steady below 1.0800 after US PCE meets expectations

EUR/USD remains depressed below 1.0800 after soft French inflation data, amid minimal volatility and thin liquidity on Good Friday. The pair barely reacted to US PCE inflation data, with the Greenback shedding some pips.  Fed Chair Jerome Powell set to speak ahead of the weekly close.

EUR/USD News

GBP/USD hovers around 1.2620 in dull trading

GBP/USD hovers around 1.2620 in dull trading

GBP/USD trades sideways above 1.2600 amid a widespread holiday restraining action across financial markets. Investors took a long weekend ahead of critical United States employment data next week. Fed Chair Powell coming up next.

GBP/USD News

Gold price sits at all-time highs above $2,230

Gold price sits at all-time highs above $2,230

Gold price holds near a fresh all-time high at $2,236 in thinned trading amid the Easter Holiday. Most major world markets remain closed, although the United States published core PCE inflation, the Federal Reserve’s favorite inflation gauge.

Gold News

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito price could hit $6 as JTO coils up inside this bullish pattern

Jito (JTO) price has been on an uptrend since forming a local bottom in early January. Since then, JTO has revisited the key swing point formed in early December, suggesting the bulls’ intention to move higher.

Read more

Key events in developed markets next week

Key events in developed markets next week

Next week, the main focus will be inflation and the labour market in the Eurozone. We expect services inflation to be impacted by the easter effect, while the unemployment rate to be unchanged.

Read more

Majors

Cryptocurrencies

Signatures