After an immediate bullish spike following the release of FOMC statement on Wednesday, the US Dollar lost upside momentum and reversed sharply against its major counterparts. The GBP/USD pair jumped to 1.3250 region while the EUR/USD pair moved closer to the very important 200-day SMA region. The Federal Reserve left is monetary policy unchanged and left doors open for lifting rates in September. The markets, however, remained skeptic over possibilities of a rate-hike in September on disappointment from US durable-goods orders data, released before the Fed announcement.
During Asian trading session on Thursday, GBP/USD pair gave-up some of its gains and dropped back below 1.3200 handle. Meanwhile, the EUR/USD pair held steady with minor gains head of a key resistance around 1.1075-80 region.
Traders now turn their attention to today's economic releases from the Euro-zone that includes - German prelim CPI and unemployment change, slated for release during European trading session. From the US the only release featuring Thursday's economic calendar would be weekly jobless claims data.
Meanwhile, the next big trigger for markets would come from some key events / releases on Friday, which includes - BOJ monetary policy decision, Euro-zone flash CPI print and advanced reading of second-quarter GDP from the US.
Technical outlook
GBP/USD
Although the pair managed to hold and rebound sharply from 61.8% Fibonacci retracement level of 1.2810-1.3481 up-swing, it is facing difficulty in sustaining its recovery gains above 38.2% Fibonacci retracement level and is reversing from a short-term descending trend-line resistance.
On the immediate downside, 50% Fibonacci retracement level near 1.3150-45 region now seems to act as immediate support. Failure to hold this immediate support would negate possibilities of any further recovery and drag the pair back towards 61.8% Fibonacci retracement level, 1.3065-55 important support.
Meanwhile on the upside, the descending trend-line resistance near 1.3250 level might continue to restrict the pair’s upside momentum beyond 38.2% Fibonacci retracement level resistance near 1.3225 level. However, a sustained break above 1.3250 resistance should immediately boost the pair beyond 1.3300 round figure mar, towards testing 23.6% Fibonacci retracement level barrier near 1.3320-25 zone.
EUR/USD
The pair continues to face stiff resistance at 200-day SMA region, indicating that the near-term consolidation phase could get extended in the near-term. However, a convincing break through this important hurdle, near 1.1075-80 region seems to boost the pair immediately towards its next resistance near 1.1150 area.
On the flip side, weakness below 1.1050 immediate support would further reinforce range-bound move and could drag the pair back towards 1.1000 psychological mark. A follow through selling pressure might continue to find strong support near 1.0960-50 region, which if broken decisively seems to turn the pair vulnerable to continue drifting lower, towards testing its next major support near 1.0860-50 region.
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