Light economic calendar sees mixed US dollar

Sterling bulls take advantage of a mixed US dollar on a day of thin economic data announcements, while euro bears continue to cash in.

US dollar note
Source: Bloomberg

Resurgent sterling could have further to go

Sterling pairs are trading in a mixed trend ahead of the London open session on Friday, with GBP/USD down -0.02% from its previous close level, and currently trading at $1.566. However, the marginal decline doesn’t show the scale of Thursday’s move higher from a low of $1.554. Without any market sensitive data releases scheduled for Friday it’s likely to be a rangebound trading session.

Despite this, the daily intermediate risk range to the downside has since been moved higher to $1.564, which held could signal a re-testing of Wednesday’s high of $1.569. However, should a close be seen sub-$1.564 then the next clear area of consolidation presents itself at $1.560.

EUR/USD could see a return to 2013 levels

EUR/USD has continued to correct to the downside, retracing almost all of its previous gains from its low of $1.224 (Dec 8) to its Dec 16 high of $1.257. It is currently trading at $1.228, down -0.07% ahead of the London open despite better-than-expected data from both Germany’s PPI and consumer climate data, coming in at 0.0% and 9.0% respectively.

The bearish trend in EUR/USD has broken below a key intermediate downside risk range at $1.229, which has seen multiple closes below suggesting continued support. This could result in a return to levels not seen since 2013 of $1.222.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts