All trading involves risk. Losses can exceed deposits.

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. 

All trading involves risk. Losses can exceed deposits.
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.

 

Spot FX GBP/USD chart

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. 

Spot FX EUR/USD chart

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts