Dollar drops again

The dollar has slipped again as the unimpressive economic data from the US recently has prompted another decline in the greenback.

GBP/USD
Source: Bloomberg

Eurogroup meeting helps euro
Greece has agreed to make some concessions to its creditors in exchange for new funding before the country runs out of cash. Athens is required to make two repayments to the international monetary fund next month, and after today’s announcement the market is no longer afraid of an immediate Greek default.

Greece will remain a thorn of the side of the European central bank for the coming years, but as far as the market is concerned, it is not going to welsh on their loans in the near-term. This has given a boost to EUR/USD.

The German IFO business climate indicator edged higher in April. It increased to 108.6 from 107.9 in March, and the rise in sentiment also assisted EUR/USD.

EUR/USD has been in an uptrend for the past ten trading sessions, and $1.09 is the initial target. A move through that would put $1.10 on the radar – but this level has been difficult to hold onto in recent months. $1.08 is acting as support and a drop below that would bring the support at $1.0770 into play, and then the 200-hour moving average at $1.0725 would be the next target. 

Sterling springs above $1.51
The pound is at its highest level against the dollar in five weeks, as disappointing manufacturing and new homes sales from the US yesterday put pressure on the greenback. GBP/USD is above $1.51 – a level not seen since the Federal Reserve’s dovish statements last month.

Today’s move in the pound has been down to the dollar, but the US durable goods report – due out at 1.30pm (London time) – will be the focus of the afternoon session. The market is anticipating an increase of 0.7% in March from a decline of 1.1% in February, and we will see short-term selling of GBP/USD should estimates be exceeded.

GBP/USD has been in an upward trend for over two weeks, and in this time it has crossed the 50- and 100–day moving average (MA) – the later hasn’t been crossed since the end of February – and this is a bullish indicator. $1.51 is acting as support, and the intra-day high of $1.5146 is the initial target and then $1.52 will be on the radar. If $1.51 is punctured then the 50-hour MA at $1.5040 will provide support, and a move through it will bring $1.50 into play.

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