The US Dollar traded mixed against the British Pound and the shared currency during early Asian session on Tuesday. The GBP/USD pair seems to extend its recovery from Monday's low level of 1.4442 and attempting a move back above 1.4500 handle, while the EUR/USD pair continues to hover around 1.1200 region. Tuesday's subdued trading action is over and above Monday's USD divergent move against its major rivals, resembling consolidation phase after three weeks of relentless rally for the greenback. On Monday, the US Dollar remained well supported by comments by Fed officials, reiterating the possibilities of a Fed rate hike, as early as June.
On Tuesday, traders will watch out for German ZEW economic sentiment index, which will be the main highlight during European session. Meanwhile aside from the 'Brexit' issue, GBP traders will keep a close eye on today's inflation report hearings, where BOE Governor and several MPC members will testify on inflation and the economic outlook before the Parliament's Treasury Committee. The hearing is likely to have a significant impact on the sentiments surrounding the British Pound. From the US, the only important release featuring Tuesday's economic calendar is new home sales data for the month of April.
Technical outlook
GBP/USD
On Monday, the pair decisively dropped below 20-day SMA support near 1.4500 psychological mark and hence, a follow through selling pressure below 1.4450 intermediate horizontal support seems to continue dragging the pair, even below 1.4400 round figure mark, towards 50-day SMA support near 1.4370 region. The downward momentum could further get extended towards 100-day SMA support near 1.4335 region.
Conversely, a move back above 1.4500 handle, leading to momentum above Monday's high resistance near 1.4545-50 area, should assist the pair to surpass 1.4600 handle and test a short-term descending trend-line resistance near 1.4630 level.
EUR/USD
The pair remains well anchored within a short-term trading range between 1.1240-1.1180 zone, consolidating around 1.1200 handle. The current consolidation phase, after a slide for three consecutive weeks, suggests that the pair is more likely to extend its near-term weakening trend. The same would get confirmed once the pair drops below the lower end of the trading range support near 1.1180 level, below which the pair could immediately slide to test 100-day SMA support near 1.1160. The downfall could further get extended towards a medium-term ascending trend-channel support, currently near 1.1100 round figure mark.
Conversely, a break-out above 1.1240-50 trading range resistance should assist the pair immediately towards reclaiming 1.1300 handle. Momentum above 1.1300 level has the potential to continue boosting the pair in the near-term, towards its next major resistance near 1.1400 handle.
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 clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.