GBP/USD Forecast: Risks breaching key support on a weak UK GDP print

The GBP/USD pair fell to a low of 1.5330, before closing the previous session slightly higher at 1.5336. The pair witnessed a moderate rally to 1.5425 on Wednesday before the European desks resumed the USD buying that resulted in the pair erasing gains and falling well below its 200-DMA located located yesterday at 1.5402.

At the moment, the pair is trading at 1.5352. The morning report of the previous session had talked about the possibility of the British Pound rising ahead of the today’s GDP data. However, that did not happen on account of the broad based USD rally. The UK first quarter GDP is widely expected to be revised higher to 2.5% from 2.4% year-on-year and to 0.5% from 0.4% quarter-on-quarter. Given the upbeat expectations, we may see the GBP/USD pair making an attempt at 1.5376 and 1.5398 (200-DMA) ahead of the data.

On technical charts, the pair manages to avoid a daily close below 1.5336 (38.2% R of 1.4564-1.5813). A rejection at 1.5425 followed by a breach of the 200-DMA support and the sell-off to 1.5330 could mean the bears are likely to be in control so long as the pair trades below 1.5425. Nevertheless, a minor corrective bounce to 1.5376-1.5398 (200-DMA) could be seen on the back of an oversold RSI on the intraday time frame. On the downside, a break below 1.5330 (100% Fib Expansion level of 1.4564-1.5445-1.5698), could open doors for sub-1.53 levels.

EUR/USD Analysis: Optimism over Greek deal could push the pair higher to 1.0963

The EUR/USD pair recovered from the low of 1.0818 after Reuters reported Greek government official saying Brussels group has started procedures to draw up a staff-level agreement. The optimism was further supported by Greek PM Tsipras who said “we have made many steps, we are on the final stretch towards a positive deal; we will present details on the deal soon; there are still different approaches among lenders; wages and pensions will be paid normally this week; there is no risk to bank deposits”.

The EUR could continue to benefit today from the optimism regarding Greece. In the meantime, the pair could be influenced by the batch of sentiment indices – Consumer and Industrial confidence, Services sentiment, Business climate. Ahead in the day, the investors would also keep an eye on the weekly jobless claims data in the US.

On the daily charts, we see a spinning bottom candle stick pattern after an almost 600-pip fall in the last eight sessions. The pair also managed to close just above 1.0898 (76.4% Fib expansion of 1.1465-1.1060-1.1206). It is worth nothing, the pair was pushed higher to 1.0927 in the early European session on Wednesday after it rose above 1.0898. A similar move is being witnessed today as the pair rose to a high of 1.0919. The immediate gains could be capped around 1.0930 (50-DMA). The bullish RSI on the hourly time frame, coupled with breach of falling trend line by the RSI on the 4-hour chart could result in a break above 1.0930, thereby opening doors for a re-test of 1.0963 (50% Fib R of 1.0461-1.14565). On the downside, a break below 1.0898 would re-enforce the bears and lead to a sell-off to 1.08.