The British Pound suffered 1.5% loss against the USD last week. The GBP/USD pair breached the rising trend line on Friday as it closed the week at 1.5489 levels. The pair took a hit on Friday after the data in the US showed the core CPI in April rose at a fastest pace since Jan 2013. No major data is due today out of the US or the UK. The markets are closed on account of trading holiday due to which the trading is likely to be thin.
The exhaustion near 1.57 followed by the sharp sell-off below the rising trend line on the daily chart and 1.5519 (23.6% R of 1.4564-1.5813) indicates the near-term top has been made. Only a daily close above 1.57 levels could increase the probability of pair breaching 1.5813 to rise further to 1.6 levels. At the moment, the pair is trading just below its hourly 100-MA located at 1.5485. The RSI is heavy on the intraday charts, while the daily RSI is threatening to fall below 50.00 levels. A break below 1.5445 could expose 1.5353 and 1.5336 (38.2% R of 1.4564-1.5813).
EUR/USD Analysis – Drops to 50% Fib Retracement
The sharp sell-off in the EUR/USD pair and a daily close below 1.1060 on Friday indicates the pair could have formed a near-term top at 1.1465. The pair also closed the previous week week below 1.1293 (23.6% R of 1.3991-1.0461). At the moment, the pair is trading at 1.0979 (50-DMA) with the daily RSI at 41.51 indicating further room for a sell-off. A break below 1.0963 (50% R of 1.0461-1.1465) exposes 1.8045 (61.8% R of 1.0461-1.1465).
However, a minor bounce to 100-DMA located at 1.1038 cannot be ruled out as the 4-hour RSI is almost oversold now. Fresh offers could be seen on the bounce so long as the pair trades below 1.1082 (38.2% R of 1.0461-1.1465).
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