GBP/USD: Upswing Toward 1.43 or Drop Below 1.40?
Dear Traders,
The U.S. dollar has proven to be stable on Tuesday amid trade tensions between the U.S. and China. Furthermore, the greenback was supported by speculation for an extended Federal Reserve hiking-cycle following hawkish commentary from Fed Governor Lael Brainard. Elsewhere, San Francisco President John Williams will be the successor to NY President William Dudley. Williams is more hawkish than Dudley.
The U.S. dollar strengthened against the euro but ended the trading day unchanged against the British pound.
As expected in our technical analysis from yesterday, the euro found a current support at 1.2250 from where it corrected some losses. If the euro now drops below 1.2240 we expect further losses towards 1.22. For bullish momentum to gain steam we would need to see a break above 1.2360.
Euro traders will watch the Eurozone Consumer Price Index today at 9:00 UTC, a report which could have an impact on the single currency.
The pound sterling rose towards 1.41 after it refrained from a decline below the rising trendline (see our analysis from Tuesday, April 3). If there is a renewed break below 1.4030 the pound could be vulnerable to further losses towards 1.40 and 1.39. However, as long as the pound remains above 1.40 we favor a bullish stance in the GBP/USD.
From the U.S., we have the ADP report scheduled for release at 12:15 UTC followed by the ISM Non-Manufacturing Index at 14:00 UTC.
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