Sterling’s failed attempt to sustain above 1.49 followed a bearish close below 1.4895 (Dec 2 low) on Monday has opened doors for a drop below 1.4865 (Dec 17 low) and slide to 1.4739 (Apr 1 low).
However, the 4-hour RSI’s turn higher from the oversold territory could see the pair make an attempt to take out the hourly 50-MA at 1.4901.
A failure to do so would open doors for a break below 1.4865 and a drop to 1.4739 levels.
The US GDP could turn out to be a non-event unless the figure is revised significantly higher/lower. An upward revision of the GDP could see the pair drop to the falling channel support at 1.4793 levels.
EUR/USD – Head and Shoulder on 4-hour chart
The EUR/USD pair shows a head and shoulder formation on the 4-hour chart with a neckline support at 1.0806 levels.
The pair is struggling to take out the hourly 200-MA (which is also 50-MA on the 4-hr chart). Consequently, the odds of a pair moving towards the neckline support at 1.0806 levels is high.
On the other hand, an hourly close above the hourly 200-MA currently seen at 1.0922 would open doors for a rise to 1.0981 levels (shoulder top).
The overall bias stays bearish so long as the pair does not see a daily close above the 200-DMA at 1.1040.
An upward revision of the third quarter GDP could see the pair suffer a bearish break from the inverted head and shoulder formation.
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