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.

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