GBP/USD Forecast: Rejected by 1.5

GBP/USD Forecast: Rejected by 1.5

The GBP/USD pair once again failed to sustain gains above 1.5 levels on Friday, despite rising to a high of 1.5054. The UK labor market data showed steady improvement in jobs, although the average hourly earnings slowed down to 1.7% from 1.9%. A drop in the earnings could have triggered a fresh selling pressure at the daily highs. As for today, the political uncertainty in the UK and the market’s appetite for the US dollar could decide the trend in the GBP/USD pair. The last week was a horrible one for the US dollar, however, the uptick in the core inflation saw the greenback make a comeback against majors. The recovery in the USD could continue today as well. Furthermore, the Greece issue is likely to keep the US Treasuries in demand, thereby helping the USD gain strength.

The pair currently trades at 1.4951, a few pips above 23.6% fib retracement of 1.4564-1.5051 located at 1.4936. On the hourly chart, the RSI has breached 50.00 and turned bearish, while the daily chart shows the pair was rejected by 50-DMA located at 1.4982. Thus, a break below 1.4936 could drive the pair lower to 1.49 and 1.4868 (weekly 10-DMA). On the other hand, a fresh intraday demand for Pounds could be seen in case the pair rises above 1.5. However, the outlook stays bearish so long as the pair fails to sustain above 1.5 on a daily closing basis. Moreover, repeated failures at/around 1.5 area could weigh heavily on the pair.

EUR/USD Analysis: 1.085 a short-term top?

The EUR/USD pair rose for four straight sessions last week, mainly on account of the broad based weakness in the US dollar. The pair rose to a high of 1.0847 on Friday, before the USD begun its recovery on a slight uptick in the core inflation. The EUR could come under renewed selling pressure this week as the Greece issue takes center stage. Apparently banking units in Southeastern Europe have been told to exit their Greek debt exposure. This indicates the fear regarding the potential Greek default and exit from the Eurozone. Greece will be meeting with its creditors on April 2nd, and at the moment it appears no deal would be reached. This would mean the country would not get funds and shall default on its payments to the IMF due to May 1st. The Greece issue is likely to dominate market sentiment, especially in the absence of major economic data today. Consequently, 1.0850 is likely to be a short-term top in the pair.

On the charts, we see the pair is hovering around 1.0776, which is the 50% Fib retracement level of 1.1034-1.0519. The failure to rise back above the same could drive the pair lower to 1.0723 (rising trend line support on the hourly chart). Moreover, the RSI on the hourly has turned bearish, indicating more room to fall. As per 4-hour chart, the sell-off could be intense once the pair dips below its 200-MA at 1.0767. Apparently, losses are being capped at the same levels at the time of writing. The outlook stays bearish, with EUR bulls likely to gain an upper hand only above its 50-DMA currently located at 1.0865 levels.