Support in eurusd tested

After a sharp rally yesterday eur/usd support is tested today. The pair retraced most of its’ gains yesterday after a few hours of rally above key 1.1500 level. However, you can also see that it came back to the area twice (yesterday and today) and by its’ price action we may guess that 1.1500 will hold today and presents us with a good opportunity to buy Euro and sell US dollars. 

You can spot that at 08:02 GMT the pair made its’ lowest point for the day by breaking Asian session low. Now, after the low was made it bounced pretty sharply off support and is currently sits at 1.1550.  Stronger resistance should come at around even number 1.1600, which also coincides with Asian session high. However, the pair might also go to yesterday’s high 1.1711. I expect the latter to hold today. 

The trend is up and one should wait for possibilities to buy on dips. 

A fundamental event that might create sharp volatility is US Consumer Confidence release that is to come out at 14:00 GMT. So, nothing fundamental till US session begins! We may see more accumulation in the meantime or another try to break key support of 1.1500. 

Key support tested

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