Dollar Rally Pauses, GBP In Overbought Territory, What’s Next?
Dear Traders,
The British pound extended its gains versus the U.S. dollar Wednesday. The GBP/USD remained stable around the 1.47-level and we are now looking for an upside break above 1.4730 in order to buy the pound towards 1.4750 and 1.4770. Caution is advised here, however: The GBP/USD is going to trade within overbought territory now and traders should expect some setbacks towards 1.4650 and 1.4610.
U.K. GDP figures are scheduled for release at 8:30 UTC but no changes are expected.
The dollar rally paused yesterday and as a result, the EUR/USD was not moving much. We generally expect the dollar rally to continue and any upside movements in this currency pair could therefore be limited until 1.1230 and 1.1280. Short-traders should rather wait for a renewed break below 1.1145 in order to sell the euro towards lower targets at 1.1120 and 1.1070.
The most important piece of U.S. data will be Durable Goods Orders, due at 12:30 UTC. If data disappoints, the dollar could lose further ground versus its major peers. Last but not least, U.S. Pending Home Sales are scheduled for release at 14:00 UTC. Figures of both reports are expected to be weak, which could weigh on the USD in the short-term.
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