The GBP/USD pair fell to an intraday low of 1.5354 on Tuesday on the back of an upbeat US core durable goods orders for April and sharp upward revisions of the previous month’s figures. Just last week the pound was near a 7-year high against a trade-weighted basket of currencies. However, the dollar has made a stellar recovery across the board after Friday’s core CPI figures indicated inflation is moving towards the Fed’s target. USD was also buoyed by Yellen’s comments that Fed could raise interest rates this year.
With an almost empty data calendar in the UK and US today, the British Pound could witness a minor uptick, especially since the Q1 UK GDP due for release tomorrow is expected to show an upward revision of the growth numbers.
The pair currently trades around 1.54, after having ended the previous session below its 200-SMA located at 1.5402. The pair could test 1.5416 (76.4% Fib expansion of 1.5813-1.5445-1.5968) on the back of a bullish RSI divergence on the hourly chart. A break above the same could push the pair higher to 1.5445-1.5472 levels. On the down side, a failure to take out 1.5416 and a subsequent drop below 1.5402 (200-SMA) could trigger fresh sell-off to 1.5354-1.5336 (38.2% Fib R of 1.4564-1.5813). Overall, the pair could be sold on rallies after having closed the previous session below 200-SMA. The daily RSI has breached the rising trend line and has turned bearish at 48.85 indicating room for further sell-off in the pair.
EUR/USD Analysis: Re-test of 1.0963?
The EUR/USD plunged to an intraday low of 1.0862, before recovering slightly to end the previous session at 1.0885. The Greek saga continued to weigh over the shared currency throughout the European session. The losses were extended further as the USD found fresh bids on an upbeat US core durable goods orders figures for April. With no major economic data scheduled for release out of the Eurozone or the US today, the focus is likely to remain on Greece issue. With no end in sight for the Greek drama, the currency pair could be offered on rise.
At the moment, the pair is trading at 1.0894 levels, after having recovered from the Asian session low of 1.0862. The bullish RSI divergence on the hourly chart is fueling the minor recovery seen in the pair. An hourly close above 1.0898 (76.4% Fib expansion of 1.1465-1.1060-1.1206) is essential for the pair to extend the recovery to 1.0957-1.0963 (50% Fib R of 1.0461-1.1465). Meanwhile, a failure to sustain above 1.0898 could push the pair down to 1.0844 (61.8% Fib R of 1.0461-1.1465) and 1.0801 (100% Fib expansion of 1.1465-1.1060-1.1206).
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