The GBP/USD pair fell to an intraday low of 1.5260 on Thursday before rising back to 1.5300 levels in the late North Amercian session. In the early European session, the cable rose to a high of 1.5384 in anticipation of an upward revision of the UK Q1 GDP before falling below the key technical support at 1.5336-1.5330 on a weak GDP print. The GDP print was not necessarily weak, but surely was weaker-than-expected. Consequently, the pair erased pre-GDP gains. Fresh offers kept coming-in as and how the pair breached key support levels at 1.5536-1.5530, 1.53.
Meanwhile, the US initial jobless claims in the last week stayed below 300K for the 12th consecutive week, while Pending home sales in April rose to 9-year highs. However, the US dollar witnessed a minor correction, courtesy of which, the pair currently trades at 1.5330. With the empty UK data docket, the focus is entirely on the US first quarter GDP. Markets expect the GDP to be revised lower to -0.9%.
The pair clocked a high of 1.5340 in the Asian session, before falling back below 1.5336 (38.2% Fib Retracement of 1.4564-1.5813) and 1.5330 (100% Fib Expansion level of 1.4564-1.5445-1.5698). A break below 200-MA on the 4-hour located at 1.5320 could see the pair re-test 1.53-1.5260 levels. On the upside, an hourly close above 1.5336 could open doors for 1.5376 levels. A re-test of 1.5260 followed by a recovery and a daily close above 1.5393 (200-DMA) would mean a short-term bottom has been created at 1.5260 levels.
EUR/USD Analysis: A break above 1.1063 could open doors for 1.1020
The EUR/USD pair recovered from the intraday low of 1.0866 on Thursday to end the day higher at 1.0961 on optimism that Greece is reaching the deal. The USD was offered in the North Amercian session even though the jobless claims stayed below 300K for the 12th consecutive week and Pending home sales rose to a 9-year high. Moreover, a correction in the USD could have been triggered in the anticipation of a downward revision to the first quarter GDP today (expected -0.9%).
Meanwhile, German retail sales due for release today are likely to show a month-on-month rebound. A better-than-expected number could trigger a break above key resistance at 1.0963. Optimism over Greece nearing the deal could also continue to support the EUR.
At the moment, the pair is trading at 1.0944 after having faced rejection at 1.0963 (50% Fib R of 1.0461-1.1465). The daily chart shows a bullish candlestick pattern - The spinning bottom formation (Wednesday), followed by a bullish candle (Thursday) opens doors for further gains to 1.10 levels. However, a rise to 1.10-1.1020 could materliaze once the pair breaks above 1.0963. Meanwhile, an early failure to break above 1.0963 could drive the pair lower to 1.0910-1.0930. However, the bullish candlestick pattern on the daily chart and a possibility of month-end unwinding of profitable dollar longs could result in the pair rising above 1.0963 to test 1.10-1.1020 levels.
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