The US Dollar traded mostly flat against its major counterparts on Wednesday as focus turns to the US President-elect Donald Trump's first news conference since the election. Markets would be looking for clarity over Trump's plans for the economy, and whether he will follow through on the campaign promises by providing specifics of fiscal stimulus measures.
Of late, the Trump-led US Dollar rally has been showing signs of fading. Hence, should Trump's comments further cool down market expectations, it might prompt a sharp greenback slide across the board and could be the first sign of near-term trend reversal.
Meanwhile, the British Pound came under fresh some fresh selling pressure around 1.2200 handle as investors remain worried over increasing possibilities of a 'hard Brexit'. Later during the day, BOE Governor Mark Carney's testimony before the Parliament's Treasury Select Committee would help investors determine the next leg of directional move for the GBP/USD major.
On the economic data front, UK Manufacturing & Industrial Production accompanied with Goods Trade Balance for November will be in focus during European session.
Technical outlook
GBP/USD
The pair’s recovery from yesterday’s multi-week lows faded near 1.2200 previous important support now turned immediate resistance. Hence, a follow through weakness below 1.2135-30 immediate support is likely to drag the pair back towards 1.2100 handle below which the downward trajectory could further get extended back towards early Oct. flash crash swing lows support near 1.20 psychological mark, with 1.2080-75 area providing some intermediate support.
Conversely, sustained recovery move back above 1.2200 handle might trigger a short-covering bounce towards 1.2280-85 resistance before the pair moves back above 1.2300 handle and aim towards testing its next resistance near 1.2335-40 region.
EUR/USD
The pair continues to witness strong resistance near 1.0620 supply zone but has managed to hold its neck above 1.0500 handle. Hence, it would be prudent to wait for a decisive break below 1.0500 psychological mark to confirm resumption of the previous downtrend or a convincing move beyond 1.0620 strong hurdle in order to gauge possibilities of further near-term recovery.
Weakness below 1.0500 mark is likely to accelerate the slide towards 1.0460-55 intermediate support below which the pair the is likely to head back towards 1.0400 round figure mark before dropping back towards multi-year lows support near 1.0350 region.
On the upside, momentum back above 1.0575 level might continue to confront strong resistance near 1.0615-20 region and a clear break through this important hurdle, leading to momentum above 50-day SMA resistance near 1.0540-45 region, now seems to pave way for continuation of the pair’s recovery towards reclaiming 1.0700 handle. A follow through buying interest has the potential to lift the pair further towards its next resistance near 1.0765-70 region.
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