GBP/USD Forecast: Re-tests Expanding triangle resistance ahead of UK data


GBPUSD

The broad based USD weakness in the NY session on Monday pushed the GBP/USD pair to a high of 1.5243 before profit taking led to a daily close at 1.5223. The softness in the USD remained intact in Aisa and pushed the GBP/USD to a high of 1.5257 levels. The investors now await the UK industrial and manufacturing production figures in the US.

UK industrial production – Downside surprise possible, but won’t be a shock

The UK industrial production is seen rising 0.3% MoM, although a downside surprise cannot be ruled out. The PMI figures for July and August highlighted the slowdown in the inflow of new work and export orders. The UK trade figures have also shown a sequential drop in the exports in the past few months. Thus, a downside surprise won’t be a surprise. Nevertheless, cable could fall back to 1.52. Further losses depend on whether the spot is able to sustain above the same while heading into the US session. A better-than-expected figure could open doors for 1.53.

Technicals – stuck at expanding triangle resistance

Sterling is having a tough time rising above 1.5248 (50% of Apr-Jun rally). The level also represents the expanding triangle (breached on the lower side in August) resistance seen on the daily chart. Failure to confirm a break above 1.5248 on the hourly chart could push the pair back to 1.52 levels, under which the losses could be extended to 1.5170. On the higher side, an hourly close above 1.5248 would expose 1.53 and 1.5319 (200-DMA) levels.


EUR/USD Analysis: Runs into falling trendline resistance

EURUSD

The EUR/USD pair rose Asian session low at 1.1172 to 1.1220 in European morning, then extended gains to 1.1232 at NY open before easing slightly to 1.1206, followed by a renewed buying which pushed the pair higher to 1.1280 near NY closing. The USD was offered across the board in the NY session yesterday after the Commerce Department showed that the US trade deficit widened to $48.33 billion in August from $41.81 billion in July, whose figure was revised from a previously estimated deficit of $41.90 billion.

With no major EU or US data due, the overall market’s appetite for the US dollars should continue to affect the movement in the EUR/USD pair today. Sentiment across the major equity markets will affect EUR and other funding currencies.

Technicals – Offered at falling trend line resistance

Euro was offered in Asia around the falling trend line resistance on the daily chart (represented by the Green line). The weakness also says the resistance zone of 1.1280-1.13 remains intact heading into the European session. Failure to take out 1.1280-1.13 would open doors for 1.12 levels, under which the spot could drop to 1.1135 (Oct 1 low). On the other side, a break above 1.13 could see the pair test the resistance at 1.1334 (blue line) followed by another trendline resistance at 1.1372.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD rises above 1.21 amid better market mood

EUR/USD has been extending its gains, recapturing 1.21 as the market mood improves. The German ZEW Economic Sentiment beat estimates with 61.8 points. Treasury Secretary nominee Janet Yellen's testimony is awaited.

EUR/USD News

GBP/USD clings to 1.36 ahead of Yellen's testimony

GBP/USD is edging above 1.36 as markets eagerly Treasury Secretary nominee Janet Yellen's testimony. The UK parliament is set to process the Brexit deal as Britain ramps up its vaccination campaign.

GBP/USD News

Gold recovers further from multi-week lows, climbs to $1845 region

Gold gained positive traction for the second consecutive session on Tuesday. A modest USD pullback was seen as a key factor that benefitted the metal. The risk-on mood, rallying US bond yields might cap gains for the commodity.

Gold news

Breaking: Ethereum explodes to new yearly high, validating upward price action

Ethereum has ascended to new yearly highs after breaking the recent peak achieved in January. The flagship altcoin is trading at $1,372 amid the push for gains eyeing $1,400. 

Read more

US Dollar Index: Downside pressure alleviated above 91.00

DXY met sellers in the 91.00 neighbourhood on Monday and now retreats to the 90.50 region on turnaround Tuesday.

US Dollar Index News

Forex Majors

Cryptocurrencies

Signatures