GDP estimates released this morning for the GBP illustrated an expansion of 0.7% in Q2 2015 compared to the Q1 growth of 2015. This has been the 10th consecutive period of growth observed by the UK economy. GBP rallied across the board strengthening against its counterparts, with likes of GBPUSD pressing against the 1.5600 barrier once more.
While the markets digest the release earlier with bullish sentiment reimbursed within the GBP, there will be CB consumer confidence later today for the US. Results are predicted at 100.1 just marginally below the previous release of 101.4. We have been dished with positive news releases from the States since last week and believe that this may be the pattern till the end of the month.
Focus still lies on the FOMC statement tomorrow. As stated previously such can either lift the USD or send it lower. What will be key may be the tone of the wordings or any indications of when the potential interest hike may materialise. USD still remains bullish among most investors with the array of positive news releases reinforcing this theme. Pairs such as EURUSD, GBPUSD, AUDUD, USDJPY and USDCHF will be affected the most by the pending statement.
Euro remains in the background, entering a phase of renewal. The ECB has approved the Greek proposal for the Athens exchange to reopen after almost 4 weeks of closure. With the fears of a Grexit taken away, doors are open wider for a potential rate hike in the States.
Effects of the slowdown in China can be felt in most commodity currencies. The CAD feeling the pressure with data showing that raw material price index was released below expectations. The previous interest rate cut by the BoC in addition to the developments in China, make the CAD weaker against its counterparts.
As the EUR enters a period of repair, the EURUSD becomes one driven by the USD. Sentiment is bullish for the USD and there have been an influx of good data strengthening the single currency. The FOMC release tomorrow will heavily affect this pair, so the best strategy may be to re-access the markets post release. If data is in favour for the USD bulls, then the EURUSD may trade back below the 1.1000 level. The daily timeframe illustrates a breakout above the 1.1040 resistance. Prices currently hover in wait for the consumer confidence which will be released shortly. The first technical trend defining level for this to keep bearish holds at 1.1200.
Intraday – The EURUSD has been intraday bearish. Prices have traded below the daily pivot and the MACD has crossed to the downside. We are below the 20 SMA with the new lower high residing at 1.1085. Prices may trade to the daily S1 of 1.0993 before the end of the day if consumer confidence is positive. A move back above the 1.1085 level invalidates this intraday bearish outlook.
The GBPUSD is currently in a battle for power. The USD is strong but so also the GBP. This struggle can be seen on the daily timeframe with the range. There is support at 1.5500 and resistance at 1.5600. The best strategy may be to simply implement a breakout. FOMC tomorrow will play a very heavy part on this pair.
Intraday – The GBPUSD started intraday flat, but the positive news release in regards to the GBP pushed prices to the daily R1 just above the 1.5600 level. Prices are currently in a range in wait for the consumer confidence which will be released shortly.
I feel that the AUDUSD should be trading lower, but technically there is some exhaustion with the bearish move with an impending correction. The USD is strong and the AUD is weak due to Gold losing value. A breakdown below the 0.7300 support was experienced last week, but the FOMC tomorrow may kick-start a move once more on this pair.
Intraday – Intraday the AUDUSD does not look very impressive. The candles suggest a lot of indecision and the technical indicators are printing mixed signals. An intraday breakout above 0.7320 or below 0.7290 may give a clearer signal. Consumer confidence for the US should be the jump start.
The USDJPY is another pair that has been driven by the USD as of late. There has been some resistance at the 124.50 level. This is a range bound market and a break is pending. The two key levels of interest are 124.50 and 123.00.
Intraday – USDJPY was intraday bullish and prices have already hit the daily R1. A breakout above 123.80 may offer further intraday bullish opportunities. A plunge back to the 123.40 invalidates this intraday bullish view.
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