The GBP/USD pair found no support from the better-than-expected PMI report released on Wednesday as the election uncertainty continued to weigh over the British Pound. The increase in the PMI was right in line with expectations and was not good enough to shift market’s attention from the political uncertainty towards upbeat economy. If the better-than-expected manufacturing PMI failed to support the GBP, it is highly unlikely that a better-than-expected construction PMI could do any better. Still, the pair has managed to recover above 1.48, courtesy of a weaker-than-expected ISM manufacturing and monthly ADP employment figure released in the US. The pair could extend the gains to 1.4880 as the USD is likely to be sold ahead of the NFP, given the ADP number missed the estimates by a wide margin.
Meanwhile, on the charts, the pair has managed to sustain above 1.4820, which is the 61.8% Fib retracement of 1.4633-1.5122. We also see, the pair has bounced-back from 1.4750 levels for the third consecutive session yesterday. The recovery has also pushed the hourly RSI above 50.00 levels today. Thus, we could see the pair rise to 1.4880-4900 levels today. A break above 1.4849, which is the 23.6% Fib retracement of 1.5550-1.4633 could see a sharp rise to 1.4880-1.49 levels. On the other hand, a failure to sustain above 1.4820 could push the pair lower to 1.4790-1.4880.
EUR/USD Forecast: Immediate gains could be capped at 1.0825
The EUR/USD pair inched higher on Wednesday, supported by the PMI reports, which showed manufacturing activity at multi-month highs in the Eurozone. However, the gains were once again capped by Greek issue. Der Spiegel, a German newspaper, reported that Greece has no plans to meet the IMF's April 9 deadline. Greek Interior Minister Voutzis said that if there is no money flowing in by that date, the IMF will have to understand that they will not be able to make the payment of 360 million Special Drawing Rights (SDR) on time. However, if the deadline is hit, the EUR come under pressure. For the time being, the pair is trading at 1.0760.
On the charts, we see the pair has bounced from the 50% Fib retracement of 1.0461-1.1050 located at 1.0756. This, coupled with the bullish RSI on the hourly time frame, could drive the pair higher to its 5-DMA located at 1.08. The rally could overshoot to 1.0825, as the USD is likely to be under pressure after the ADP reported a big miss on its monthly employment number yesterday. A fresh selling pressure in the EUR could be anticipated at 1.0825, which is 38.2% Fib retracement of 1.0461-1.1050.
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