The GBP/USD pair rose to a high of 1.4668 after the BOE surprised markets with its slightly less dovish stance. However, the spot fell back below 1.46 levels since the policymakers did vote 9-0 in favor of maintaining the interest rates at record lows. The focus today is on the US non-farm payrolls data. The impact on Gold and cable is discussed here (Macro Scan).
Technicals – Rising trend line intact, strong support around 1.4515
The hourly chart shows the pair is heading towards the rising trendline support seen at 1.4542.
A break lower appears likely given the hourly RSI is already below 50.00. Hence, doors are open for a re-test of the strong support zone of 1.4519-1.4516 (38.2% of 1.5230-1.4079 + 23.6% of 1.5930-1.4079).
The bulls are likely to remain in control so long as the support zone of 1.4519-1.4516 remains intact.
Hence, a rebound from 1.4519-1.4516 could see the spot challenger previous day’s high if 1.4668.
EUR/USD Analysis: Strong resistance at 1.1236
The bullish momentum in the EUR/USD pair strengthened further on Thursday, pushing the pair higher to 1.1239 before a minor bout of profit taking saw the pair end the day at 1.1206 levels. The main event for the day is the US non-farm payrolls figure and its effect on the EUR/USD and USD/JPY pair is discussed in detail here (Nonfarm Payrolls Forecast).
Technicals – Further gains need bullish break above 1.1236
Euro’s bullish break from the falling channel, falling trend line this week followed by a break above the rising trend line (Mar low to April low and extended) yesterday indicates the bulls are in complete control of the pair.
However, the 4-hour RSI has hit the overbought territory.
The hourly chart also shows a bearish Price RSI divergence.
Hence, a technical correction to 1.1145 (Feb 3 low) and possibly to 1.11 levels cannot be ruled out.
Further bullish move would require a convincing break above 1.1236 (38.2% of Mar low-Aug high), in which case 1.1292 (23.6% of Apr 2014 high-Marc 2015 low) could be put to test.
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