GBP/USD Forecast: Pushing into Fib resistance

The GBP/USD pair rose to an intraday high of 1.5068 levels on Thursday on the back of a sharp fall in the new home sales in the US and due to weakness in the US manufacturing data. The British Pound gained despite the surprising drop in the UK retail sales in March, which means the rise was mainly due to broad based weakness in the USD. I still believe that the rise in the pair could be utilized to initiate fresh sell ahead of the elections in the UK. The pair could rise to its 100-DMA at 1.5094 today on signs of Greek reaching a deal. Further gains to 1.5140-1.5173 could be seen in case the US durable goods data sees another monthly disappointment. However, the rise could be utilized to sell as the GBP is likely to be offered from the midweek or later part of the next week. In 2010, the pair dropped 300 pips. The high probability of a hung parliament is likely to weigh over British Pound next week.

The daily chart shows, the pair failed to sustain gains for the second consecutive session above 1.5057 (50% Fib retracement of 1.5550-1.4564). A break above 1.5057 on the hourly/4-hourly charts could open doors for a test of 100-DMA at 1.5094-1.51. On the other hand, the pair could drop to 1.4994 (5-DMA) in case it fails to break above 1.5057. However, a daily close above 1.5 for two consecutive sessions is likely to keep bears at bay. Above 1.51, the pair could extend gains to 1.5173 (61.8% Fib retracement of 1.5550-1.4564). Such gains, however, are likely on a weaker-than-expected US durable goods data.

Moreover, a break above 1.51 would be a breach of the inverted head and shoulder formation seen on the 4-hour chart.

EUR/USD Analysis: EUR could drop if the Greek ‘Can’ is kicked down the road

The EUR/USD pair has been rejected at the 50-DMA located at 1.0817 ahead of the Eurogroup meeting in Riga. Amid all the confusing and contradicting statements from the EU as well as Greek officials, the pair rose to a high of 1.0843 levels on Thursday. The weak US data is partly responsible for the rise in the EUR/USD pair, while part of the gains have been triggered by the expectation that the can would be kicked down the road at the Eurogroup meeting. Hence, the near-term top at 1.0850 is likely to remain intact in case Greece is allotted a new deadline. Meanwhile, a breakthrough deal would be a major surprise, which could push the pair higher to 1.10 levels. On the other hand, the pair could begin its journey back to 1.05 in case no progress is made over the issue.

On the daily charts, we see the pair has been rejected at the 50-DMA located at 1.0817 levels in the Asian session. The daily RSI is trading above mid line, which indicates further room for the upside. A break above 1.0850 (latest cyclical top) could push the pair higher to 1.0869 (38.2% Fib retracement of 1.1532-1.0461). On the other hand, the immediate losses appear capped around 1.0764 (5-DMA) and 1.0712 (23.6% Fib retracement of 1.1532-1.0461).