Forex snapshot

Sterling received a boost after UK construction activity jumped in June, while the euro has pulled back some of the ground it lost after eurozone growth figures remained unchanged.

Euro and US dollar notes
Source: Bloomberg

Pound climbs after construction data

The pound is trading at $1.7166, up 0.1%, after the UK construction figures for June showed an increase in activity on the month, and came in above expectations.

GBP/USD reached a new five-year high for the second day in a row following the announcement, and today’s construction figures highlight Mark Carney’s concern about the UK property market.

The pound’s acceleration versus the US dollar has been particularly fast in the last week. However, a strong jobs report from the US tomorrow could reverse some of the gains made in recent trading sessions.

GBP/USD is receiving support at the 50-hour moving average of $1.7120 and if it drops below that, the next level to watch is the 200-hour MA of $1.7040. 

Euro steady after GDP figures

The euro is trading at $1.3663 and was drifting lower, this morning, in the run up to the final reading of the first-quarter GDP figures; growth was a mere 0.2%, unchanged from the first reading.

I suspect there will be little volatility in the euro over the next 24 hours, as traders await the European Central Bank rate decision and press conference tomorrow at 12.45pm and 1.30pm respectively. Traders are not expecting any change in the base rate but as Alastair McCaig stated, the language used by Mario Draghi in the press conference could drive EUR/USD lower.

If the currency pair drops below the $1.3610 mark the next target down would be $1.3575, while the 50-hour moving average of $1.3680 is acting as resistance to any upside momentum. 

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