The US Dollar traded mixed against the British Pound and the shared currency during early Asian session on Tuesday. The GBP/USD pair seems to extend its recovery from Monday's low level of 1.4442 and attempting a move back above 1.4500 handle, while the EUR/USD pair continues to hover around 1.1200 region. Tuesday's subdued trading action is over and above Monday's USD divergent move against its major rivals, resembling consolidation phase after three weeks of relentless rally for the greenback. On Monday, the US Dollar remained well supported by comments by Fed officials, reiterating the possibilities of a Fed rate hike, as early as June.
On Tuesday, traders will watch out for German ZEW economic sentiment index, which will be the main highlight during European session. Meanwhile aside from the 'Brexit' issue, GBP traders will keep a close eye on today's inflation report hearings, where BOE Governor and several MPC members will testify on inflation and the economic outlook before the Parliament's Treasury Committee. The hearing is likely to have a significant impact on the sentiments surrounding the British Pound. From the US, the only important release featuring Tuesday's economic calendar is new home sales data for the month of April.
Technical outlook
GBP/USD
On Monday, the pair decisively dropped below 20-day SMA support near 1.4500 psychological mark and hence, a follow through selling pressure below 1.4450 intermediate horizontal support seems to continue dragging the pair, even below 1.4400 round figure mark, towards 50-day SMA support near 1.4370 region. The downward momentum could further get extended towards 100-day SMA support near 1.4335 region.
Conversely, a move back above 1.4500 handle, leading to momentum above Monday's high resistance near 1.4545-50 area, should assist the pair to surpass 1.4600 handle and test a short-term descending trend-line resistance near 1.4630 level.
EUR/USD
The pair remains well anchored within a short-term trading range between 1.1240-1.1180 zone, consolidating around 1.1200 handle. The current consolidation phase, after a slide for three consecutive weeks, suggests that the pair is more likely to extend its near-term weakening trend. The same would get confirmed once the pair drops below the lower end of the trading range support near 1.1180 level, below which the pair could immediately slide to test 100-day SMA support near 1.1160. The downfall could further get extended towards a medium-term ascending trend-channel support, currently near 1.1100 round figure mark.
Conversely, a break-out above 1.1240-50 trading range resistance should assist the pair immediately towards reclaiming 1.1300 handle. Momentum above 1.1300 level has the potential to continue boosting the pair in the near-term, towards its next major resistance near 1.1400 handle.
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