The GBP/USD pair fell to more than one week low of 1.4751 on Monday as election uncertainty and slowdown in price pressures in the UK continued to hurt Pound in the absence of fresh macro economic trigger. The US data was slightly upbeat, despite which the Treasury yields could not strengthen. Thus, the weakness in the pair was largely due to the election uncertainty and falling inflation in the UK. The UK Current account in Q4 is seen improving, while the year-on-year Q4 GDP is expected to tick up to 2.7%, while quarter-on-quarter Q4 GDP is seen slowing down to 0.5%. Both the data sets are unlikely to provide much of a relief to the pair.
On the charts, the pair has breached the support at 1.48 and trades at between the 61.8% Fib and 76.4% Fib retracement level of the move from 1.4633-1.5122 located at 1.4819 and 1.4748. The sell-off in the previous session stalled around the 76.4% Fib retracement at 1.4748. The pair could rise to 1.48-1.4819 in anticipation of an upbeat year-on-year Q4 GDP. However, gains could be capped around 1.4819 as it would take a surprisingly strong data to overshadow election uncertainty and falling inflation. On the other hand, the downside appears restricted around 1.4748. Given, the bearish RSI on the daily, hourly and 4-hour time frame, the pair could fall back to 1.4748 levels after re-testing 1.48-1.4819. Overall, the pair is likely to remain capped in the range of 1.4748-1.4819 atleast throughout the European session.
EUR/USD Analysis: Weak German data could push the pair down to 1.0760-1.0750
The EUR/USD pair dipped below 1.08 after Greece’s creditors kicked the plan submitted by the Greek government back to the officials as it lacked substance. The German data due for release today could provide a negative surprise. As per the PMI reports, the retail sales growth slowed down to 4-month low, while the pace of job additions in the manufacturing and service sector also slowed. Consequently, the German retail sales number and the employment figures could disappoint expectations, thereby pushing the pair down to 1.0760-1.0750 levels. On the other hand, a better-than-expected data may not be able to provide any relief as the Greek situation is likely to keep EUR bulls at bay.
On the charts, the pair is trading below 1.08, with the daily RSI bearish at 44.36. On the hourly too, the RSI is bearish. The pair was also rejected by the falling trend line resistance on the hourly chart earlier today. Thus, the pair could drop to 1.0755, which is the 50% Fib retracement level of 1.0461-1.1050. A fresh demand for the Euros could be seen around 1.7050-1.0755 levels. However, the immediate gains are unlikely to be significant so long as the Greek concerns exist. The immediate upside appears capped at 1.0825.
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