Thursday's disappointment from the Bank of Japan's decision continued to weigh on the US Dollar (USD) on Friday. Friday's data on the US inflation as measured by the PCE index, the Fed’s preferred measure of inflation, failed to extend any support to the greenback. The core PCE index, which excludes the volatile food and energy categories, rose just 0.1% m/m in March while it was up 1.6% from March 2015 as compared to 1.7% in the previous month. The inflation data along with weak reading on US economic growth during the first quarter of 2016, continued to fuel speculations that the Fed might refrain from raising interest rates during its meeting in June, dragging USD further into negative territory.
The GDP/USD pair rose to its highest level since Feb. before retreating back to 1.4600 handle. On the other hand, the EUR/USD pair surged passed Feb. high level of 1.1465 to its highest level since Oct. mid-October 2015 on better-than-expected region's GDP data for the first quarter of 2016. Data released on Friday showed Euro-zone GDP rose 0.6% in the first quarter of 2016, which was better-than 0.4% consensus estimates and marking a pick-up from 0.3% growth recorded in the last quarter of 2015.
Today's trading moves for GBP/USD and EUR/USD pairs would be influenced by PMI data from the Euro-zone and US ISM manufacturing PMI.
Technical Outlook
GBP/USD
Although the pair continues to trade above 1.4600 handle, it seems to face difficulty in building onto its gains and break-through Feb. highs resistance near 1.4668-70 area. Hence, in order to open room for further appreciating move, the pair need to decisively clear this immediate resistance. A clear break-through above 1.4668-70 resistance, now seems to assist the pair in surpassing 1.4700 round figure mark resistance towards testing a short-term ascending trend-channel resistance near 1.4800 handle.
On the flip slide, the pair is trading close to a short-term ascending trend-channel support, currently near 1.4585 level. A convincing break below this immediate support might now trigger a short-term corrective move, initially towards 1.4540 intermediate support and eventually towards a very important support near 1.4470-75 area.
EUR/USD
The pair on Friday managed to provide a highest weekly close since May 2015, clearly indicating that the bulls are in full control. From current levels, the pair could be aiming to test Oct. 2015 high level resistance near 1.1490-92 region, which if cleared has the potential to continue boosting the pair towards Feb. 2015 highs resistance near 1.1533-35 area.
On hourly charts, RSI reading above 70 is pointing towards slightly overbought conditions, warranting a near-term consolidation or a minor pull-back towards its previous strong resistance now turned support near 1.1415-1.1400 handle. Any subsequent weakness is likely to be limited and should be bought into near 1.1335-30 support area.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD declines below 1.0700 as USD recovery continues
EUR/USD lost its traction and declined below 1.0700 after spending the first half of the day in a tight channel. The US Dollar extends its recovery following the strong Unit Labor Costs data and weighs on the pair ahead of Friday's jobs report.
GBP/USD struggles to hold above 1.2500
GBP/USD turned south and dropped below 1.2500 in the American session on Thursday. The US Dollar continues to push higher following the Fed-inspired decline on Wednesday and doesn't allow the pair to regain its traction.
Gold stuck around $2,300 as market players lack directional conviction
Gold extended its daily slide and dropped below $2,290 in the second half of the day on Thursday. The benchmark 10-year US Treasury bond yield erased its daily losses after US data, causing XAU/USD to stretch lower ahead of Friday's US jobs data.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
Happy Apple day
Apple is due to report Q1 results today after the bell. Expectations are soft given that Apple’s Chinese business got a major hit in Q1 as competitors increased their market share against the giant Apple.