Dear Traders,
The euro was initially supported by better than expected eurozone PMI reports but the moderate upward trend did not discourage dollar bulls from pushing the common currency for another test of 1.06. For the time being, the 1.06 barrier was able to withstand the downward pressure. A next important support could be at 1.0585, whereas short-term resistances are seen at 1.0690 and 1.0720.The pound sterling showed a short squeeze toward 1.5190 before falling to a daily low of 1.5108. Short-traders who took advantage of our short-entry were able to gain a small profit.
There is a bunch of interesting data scheduled for release today, which should have an impact on the currency market. The most interesting piece of data will be the U.S. GDP report and Consumer Confidence. While the reports are expected to underline the recovery in the U.S. economy, any surprises could lead to a strong reaction in the USD.
Sterling traders should pay close attention to the testimony of Bank of England Governor Mark Carney today at 10:00 GMT. Carney is due to testify to lawmakers about the BoE's latest Inflation Report. Given the overall dovish tone of the inflation report market participants will listen carefully to Carney's tone. If he signals that the BoE is in no rush to raise interest rates, maintaining a cautious stance, the British pound could experience further losses towards 1.50. It could therefore be an interesting trading day for GBP/USD and we expect increased volatility.
GBP/USD
GBP could be vulnerable to further losses. Next supports could be at 1.5090, 1.5060 and 1.5030, whereas the area around 1.50-1.4980 may act as a key support. Only a significant break above 1.5245 should reinforce bullish momentum.
Important data for today:
9:00 EUR German IFO Index
10:00 UK Carney Testifies To U.K. Treasury Committee
13:30 USA GDP Reports
15:00 USA Consumer Confidence
Daily Forex signals:
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