British Pound Testing Yesterday Low

After three days of going down gbp/usd is testing yesterday’s low and it might hold this time. GB Gross Domestic Product data came out exactly as expected both annual and quarterly figures being the same as predicted. This did not stop cable from falling down. It rallied initially on the numbers, but later collapsed and is now breaking or trying to break 1.5370 level. We need to wait for hourly candle close to be surer whether the breakout is a convincing one or a false one. 

It seems to me that some profit taking on US dollar longs should be taken before the weekend and so we may see greenback giving up gains. Resistance is seen around even number of 1.5500. No more serious data is scheduled from Great Britain or US. Traders will watch numbers from Europe at 12:00 GMT when German Consumer Price Index data comes out. This will have more impact on eur/usd and possibly eur/gbp pair. I do expect Euro Pound pair to erase its gains after strong rising since 18^th of August. 

US Personal Consumption Expenditure, Personal Income and Personal Spending come out at 12:30 GMT, but the data will probably not impact any of the above mentioned currencies much. 

Both eurusd and gbpusd at key support

Both eur/usd and gbp/usd have been falling for three days now. Well, actually Euro has been falling for four days, as it rallies sharply on the 24^th of August, but reversed dramatically the same day and started collapsing. 

We saw that 200 sma on 1, 2, 4 and even 8 hour charts could not stop cable from depreciating against the greenback. Yet current price action shows that a reversal by the end of the week (this Friday) is possible. A bullish candle on both 4 and 8 hour charts indicates that the support may have been reached and buying pressure is coming in. Some resistance seen at 1.5450 level. I will be waiting for more signs of buying to start opening a long position myself. 

On the other hand, Euro fell around 500 pips against US dollar since Monday and as I mentioned in my previous post, it hit key support and is slightly rising now. One can spot a bullish candle on 8 hour chart too. It may mean that Friday will see Euro and Pound rising and greenback falling. 

Key fundamental news tomorrow:

GBP Gross Domestic Product at: 08:30 GMT

EUR German Consumer Price Index at: 12:00 GMT

Euro Crashes in Waves Against US Dollar

After a sharp rally upward from strong resistance of 1.1200 level eur/usd reached strong resistance at 1.1700 and reversed dramatically dropping close to 400 pips in the last three days. The next logical level of support is surely 1.1200 level. According to definition of classical technical analysis previous resistance becomes support. So, if 1.1200 level was resistance, it should act now as support. There are around 130 pips to go till the target. It will be probably reached by the end of the week, possibly even tomorrow. 

Key fundamental data that might influence the moves in the pair:

Thursday: USD Gross Domestic Product Price Index at 12:30 GMT.

Friday: GBP Gross Domestic Product at 08:30 GMT. 

I do expect price to continue going in waves and a rally is expected at current level: 1.1322. Intra-day support is at an even number of 1.1300. Intra-day resistance is at an even number of 1.1400.

As always I will repeat myself by saying that I want to see a reversal pattern at a key level before I start buying or selling. This in most situations will be a candle pattern that develops on an hourly or 15 minute chart.

The pair is going down in waves

Pound closes below 1.5700 against US dollar

For a number of weeks gbp/usd fails to overcome 1.5700 level. I don’t see it as bearish or bullish; just state the fact how important the number is. There has to be a break at some point: up or down. On the other hand, 1.5688 is pretty close. That’s what the close was in the pair (at least on my charts). By looking at the 4 hour chart below you can see that from the 7^th of August cable was clearly making higher highs and higher lows against the greenback. It implies that Pound was in accumulation process and US dollar in distribution. This may not mean the tendency will continue, but it is likely.

Forex news that might impact exchange rate of the pair:

Tuesday: 14:00 GMT US Consumer Confidence

Wednesday: 12:30 GMT US Durable Goods Orders

Thursday: 12:30 GMT US Gross Domestic Product

Friday: 08:30 GMT GBP Gross Domestic Product

In my opinion the pair may broke or reverse from the key level any time at the start of the week without waiting for the above mentioned economic releases. Both FED minutes and BOE interest rates have been announced, so we may expect technical moves at any time next week. 

See with more updates on this Monday.

Higher highs and lows in gbp/usd