Pound pulls back losses

The pound has bounced back from yesterday’s session as the broad sell-off across the dollar gives sterling a hand. 

Pound sterling
Source: Bloomberg

Pound pops higher

GBP/USD has pulled back the losses it suffered yesterday when UK inflation fell to its lowest level on record.

The pound is performing well when you consider that the UK is edging closer to deflation, and  as I noted, Mark Carney is open to interest rates cuts.

The short-term upward trend that the pound has been experiencing appears to be running out of steam, and we could be on the verge of a reversal. The big picture clearly shows that GBP/USD is in a downward trend and is about to resume its usual move lower.

The level of resistance is $1.49; if this is held the 200-hour moving average of $1.4830 will be the first target, and beyond that traders will look to $1.48. A move above $1.49 will put the $1.50 mark on the radar.

 

Euro trades sideways

EUR/USD has consolidated in the $1.0930 region now that the upward trend it has been in since last week has stalled. It seems that $1.10 is out of reach for the currency pair for now. The single currency was in major demand on the back of the Federal Reserve's dovish statement last week, but now the honeymoon period is over.

The political rumbling in Greece provides noise in the background as the nation could run out of cash by the end of April, and this will weigh on EUR/USD. The market is quietly confident some deal will be struck in relation to Athens’ financing, but even the mention of the word ‘default’ will keep the euro under pressure.

The acting level of support is $1.09, and if that mark is punctured the next level of support will be found at the 100-hour moving average of $1.0830; a move through that mark will bring $1.08 into sight. If $1.09 is held, the resistance at $1.10 will be the target, and if cleared, the 50-day moving average at $1.1116 will be the next level of resistance. 

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