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