The U.S. dollar weakened slightly against the euro and British pound Wednesday. After peaking at a daily high of 1.0946 the euro, however, shied away from its resistance at 1.0950 and dropped back below 1.09. If the EUR/USD remains unable to take the hurdle at 1.0950 we expect further losses towards 1.08. In case of a rise above 1.0965 it may head for a test of 1.10. The greenback will be back in focus within the next 48 hours with Durable Goods Orders scheduled for release today at 12:30 UTC and Gross Domestic Product data due tomorrow. GDP data and the nonfarm payrolls report next week will offer further clues on the health of the U.S. economy.
The pound sterling still remained within its current trading range between 1.2250 and 1.2150. Above 1.2250 it may head for a test of 1.2320 but be careful, the risks are currently rather still geared to the downside and it only takes one negative impulse to reinvigorate fresh bearish momentum in the GBP/USD. This impulse might come from important U.K. data such as today’s Gross Domestic Product figures, due at 8:30 UTC. If GDP numbers come in below expectations we could see sterling tumbling towards 1.2150 and further 1.21. Below .2130 we are looking for a steeper fall towards 1.20.
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