The U.S. dollar has depreciated against most major currency peers after the Federal Reserve lowered expectations for the path of interest rate increases in 2016. The British pound surged to a fresh one-month high after the Bank of England left interest rates unchanged. The 1.45- level will now be crucial for the currency pair. Once GBP breaks above 1.4515 we see next resistances at 1.4545 and 1.4580. On the bottom side there could be a current support zone around the 1.43-level.
The euro climbed above 1.13 and marked a new high at 1.1342. The big questions now is whether the euro will extend its gains even further but looking at the four-hour chart we see a major resistance at 1.1370/75 that could limit gains in the pair. However, in case of a break above 1.14 the next important resistance level is seen at 1.15. On the bottom side, we will turn our focus to a downside break of the 1.1275-level which could increase bearish momentum towards 1.1240 and 1.1160.
We had a successful week and therefore recommend traders not to reinvest their weekly profits and even consider a trading break today. So we will stay risk-averse and save our profits.
Michigan Confidence due for release at 14:00 GMT is the only important piece of U.S. data today.
We wish everyone a beautiful weekend!
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