The GBP/USD pair clocked an intraday high of 1.5789 on Monday, but failed to take out the resistance at 1.5749 (23.6% Fib R of 1.5169-1.5928) on closing basis for the fourth consecutive session. The pair was largely guided by the movement in the EUR/GBP cross throughout the day. The EUR shot higher on verbal assurances about Greek deal from the EU bigwigs. Consequently, an uptick in the EUR/GBP restricted the gains in the GBP/USD throughout the European session. The cable did clock a high of 1.5789, but once again the USD recovered to ensure the daily close at 1.5727.
The Greek impasse is likely to keep the pair under pressure. The UK final 1Q Gross Domestic Product (GDP) (expected 2.5%, previous 2.4%) due tomorrow may heighten expectations of an interest rate hike. However, the pair may not be able to witness a daily close above 1.5749 due to the Greece issue and strong non-farm payrolls expectations (230K). Still an intraday rally to 1.5790 cannot be ruled out in case of a strong UK GDP.
At the moment, the pair is trading at 1.5728. Given the repeated failure to take out 1.5749 on closing basis, the pair could re-test the support at 1.5667. The pair was also rejected at its hourly 50-MA in the North American session, which was followed by a bearish daily close below 1.5749. Fresh offers are likely to hit the pair in the early European session, taking it to 1.57-1.5667 levels. A break below 1.5667 could push the pair down to 1.5606 (23.6% Fib R of 1.4564-1.5928). On the other hand, a break above 1.5749 could see the pair re-test 1.5790-1.5800.
EUR/USD Analysis: Eyes 1.1330 after filling Monday’s gap down opening
The single currency opened sharply lower on Monday and fell to a low of 1.0953 in New Zealand due to Greek talks failed, however, the pair witnessed short-covering and then extended the recovery in the European and US session on account of verbal assurance from the EU officials. Euro later rose to as high as 1.1278 before closing at 1.1218. The euro was also supported by intervention from the Swiss National Bank, which is buying EUR/CHF to actively weaken the Swiss Franc.
As per the latest reports, Greece rejected a last minute opportunity to reach a new bailout deal with its creditors ahead of Tuesday's IMF payment deadline. Consequently, the pair fell below 1.12 levels in the Asian session.
At the moment, the pair is trading at 1.1190 (50-DMA). The spot filled the entire gap down opening witnessed in the early Asian session on Monday. Consequently, a break below the 50-DMA could trigger another sell-off to 1.1130 (June 26 low). A break below the same could push the pair down to 1.1082-1.1050. On the other hand, a break above 1.1293 (23.6% Fib R of 1.3991-1.0461) would open doors for a re-test of 1.1350. However, the move towards 1.1293 is unlikely as – Greece likely to default today, the SNB may remain on the sidelines after having intervened on Monday. Thus, a downside move to 1.1130 is more likely today.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.