USD bulls continue to dominate

Solid UK GDP data has been unable to stem the bearish tide as the US dollar continues to dominate both sterling and the euro.

A euro and pound coin
Source: Bloomberg

EUR/USD breaks down further

A weakening in the US housing market, according to Monday’s release of the US existing home sales data which came in at 4.93m (prev. 5.25m), wasn’t enough to stem EUR/USD weakness and has continued to edge lower.

Ahead of the London open, however, EUR/USD was up 0.06%, trading at $1.2235 and retesting a previous area of resistance at $1.2239. This could turn into support if a close is seen below this level.

Further short-term downside in EUR/USD could be realised should expectations be met for a rebound to 1.1% in US core durable goods orders data, scheduled for release at 13:30 (London time).

Tuesday’s area of support/resistance is seen at $1.2239, which if held could then see a further move lower to $1.2176.

GBP/USD lower despite positive UK GDP data

GBP/USD is trading lower on Tuesday following the release of the UK’s GDP data, which came in at 3.6% year on year (beating expectations of 3.0%) and flat quarter on quarter at 0.7%. The currency pair is currently trading at $1.5565 having seen a short-term spike into Tuesday’s area of support at $1.5606, before touching a low of $1.5551.

Following the sharp move it is likely GBP/USD will now begin to trade in a period of consolidation, with both the daily high and low prices acting as natural support/resistance. 

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