The British Pound strengthened across the board on Thursday, with the GBP/USD pair surging to its strongest level in two-weeks after stellar UK monthly retail sales data eased fears of economic fallout following UK’s decision to end its membership with the European Union. The pair extended its up-move to 1.3200 neighborhood during early Asian session on Friday before retracing from highs to currently trade with slight negative bias around mid-1.3100s.
Meanwhile, the greenback remained under selling pressure after the minutes from FOMC July monetary policy meeting failed to provide any clues on the timing on next Fed rate-hike decision. Amid broad based US Dollar selling, the EUR/USD pair touched a fresh post-Brexit high level of 1.1366 and now seems headed for a third weekly gains in the previous four.
Friday's only release from the UK, public sector net borrowing, would be a non-market-moving event and hence, today's moves in the FX market would be solely driven by broader sentiment surrounding the greenback.
Technical outlook
GBP/USD
Thursday’s momentum assisted the pair to conquer an important confluence resistance near 1.3115 level, comprising of 200-SMA (4-hourly) and 50% Fibonacci retracement level of 1.3372-1.2866 recent downslide, which now seems to protect immediate downside. Failure to hold this resistance turned immediate support should extend the corrective move towards 1.3100 handle and any further weakness below 1.3100 mark is likely to be limited and might be bought into near 1.3060-55 strong support marking 38.2% Fibonacci retracement level.
Meanwhile on the upside, 61.8% Fibonacci retracement level near 1.3175-80 zone is acting as immediate hurdle, which if cleared should continue boosting the pair further towards 1.3255-60 horizontal resistance before the pair darts towards reclaiming 1.3300 level and head back to monthly high resistance near 1.3350-70 region.
EUR/USD
On 1-hourly chart, the pair is seen oscillating within a short-term ascending trend-channel and is now retracing from channel resistance. From current levels, further retracement is likely to find support at 50-hourly SMA near 1.1300 round figure mark. A follow through pull-back seems to extend the corrective move towards the ascending trend-channel support near 1.1250-45 area. Only a decisive break below this important support would negate prospects of any further up-move for the pair and turn it vulnerable to extend its downslide in the near-term.
Meanwhile on the upside, 1.1370-75 region (trend-channel resistance) remains immediate hurdle, which if cleared should lift the pair to pre-Brexit swing high resistance near 1.1425-30 region. Sustained momentum above 1.1400 handle could further get extended towards 1.1500 psychological mark before retesting early May daily closing high resistance near 1.1530-35 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.
Editors’ Picks
EUR/USD stays depressed near 1.0650, awaits US data and Fed verdict
EUR/USD holds lower ground near 1.0650 amid a softer risk tone and broad US Dollar strength on Wednesday. With European markets closed for Labor Day, the pair awaits the US employment data and the Fed policy announcements for the next directional move.
GBP/USD keeps losses below 1.2500 ahead of US data, Fed
GBP/USD holds lower ground below 1.2500 early Wednesday. The stronger US Dollar supports the downtick of the pair amid the cautious mood ahead of the top-tier US employment data and the all-important Fed policy announcements.
Gold sellers keep sight on $2,223 and the Fed decision
Gold price is catching a breather early Wednesday, having hit a four-week low at $2,285 on Tuesday. Traders refrain from placing fresh directional bets on Gold price, anticipating the all-important US Federal Reserve interest rate decision due later in the day.
Ethereum dips below key level as Hong Kong ETFs underperform
Ethereum experienced a further decline on Tuesday following a disappointing first-day trading volume for Hong Kong's spot Bitcoin and ETH ETFs. This comes off the back of increased long liquidations and mixed whale activity surrounding the top altcoin.
ADP Employment Change Preview: US private sector expected to add 179K new jobs in April
The ADP report is expected to show the US private sector added 179K jobs in April. A tight labour market and sticky inflation support the Fed’s tight stance. The US Dollar seems to have entered a consolidative phase.
RECOMMENDED LESSONS
Making money in forex is easy if you know how the bankers trade!
Discover how to make money in forex is easy if you know how the bankers trade!
5 Forex News Events You Need To Know
In the fast moving world of currency markets, it is extremely important for new traders to know the list of important forex news...
Top 10 Chart Patterns Every Trader Should Know
Chart patterns are one of the most effective trading tools for a trader. They are pure price-action, and form on the basis of underlying buying and...
7 Ways to Avoid Forex Scams
The forex industry is recently seeing more and more scams. Here are 7 ways to avoid losing your money in such scams: Forex scams are becoming frequent. Michael Greenberg reports on luxurious expenses, including a submarine bought from the money taken from forex traders. Here’s another report of a forex fraud. So, how can we avoid falling in such forex scams?
What Are the 10 Fatal Mistakes Traders Make
Trading is exciting. Trading is hard. Trading is extremely hard. Some say that it takes more than 10,000 hours to master. Others believe that trading is the way to quick riches. They might be both wrong. What is important to know that no matter how experienced you are, mistakes will be part of the trading process.