Final assessment of UK GDP
The dollar traded higher against almost all of its G10 counterparts during the European session on Tuesday, starting with + 0.14% compared to GBP up 0.85% against the Norwegian krone. He was only slightly lower against the yen.
The euro traded lower even after data released preliminary estimates of Eurozone CPI -0.1% year on year in March against 0.3% YoY in February, in line with expectations. unemployment rate decreased to 11.3% in February compared with revised upward 11.4% in January. Even falling unemployment in Germany to a record low level was not enough to reverse the negative sentiment towards the euro. EUR / USD dropped below the 1.0800 level and is currently testing the next support 1.0700. A break of this level could trigger a downward spiral, possibly to 1.0610.
GDP final assessment UK 4Q showed an increase of + 0.6% to + quarterly basis and 3.0% a year, not coinciding with expectations changes according to 2nd assessment (+ 0.5% qoq). GBP / USD jumped on the news, but played all the gains as soon as the bears once again found an opportunity to sell GBP. In spite of strong data, the uncertainty before the general elections in the UK in May, is likely to put pressure on sterling and trigger a push GBP / USD lower. Nevertheless, better data may support the GBP against the euro.
Pair EUR / GBP is trading lower during the European session on Tuesday, after being confronted with resistance at 0,7340 (R1). After the break below the short-term uptrend, taken from a minimum of 11 March, the course began trading within the descending channel possible. For this reason, I would like to address short-term shifts in the negative direction. Movement lower support line 0,7230 (S1), may set the stage for more bear extensions and open the way to the next support at 0,7160 (S2). Our short-term oscillators show a negative trend and support the continuation of the short-term downtrend newborn. RSI slid after impact on the level of resistance is near its line 50 and now it toward the line 30, while MACD, already below its starting, it is immersed in the negative zone. On the daily chart trend also remains negative. After the release of the triangle, the price structure forms the lower peaks and lower highs to below as the 50- and 200-day moving average. The recent decline occurred after the EUR / GBP reached the resistance at 50-day moving average and it supports my position that the recovery, which began March 11, can be seen as a corrective movement, more negative way.
- Support: 0,7230 (S1), 0,7160 (S2), 0,7100 (S3)
- Resistance: 0,7340 (R1), 0,7385 (R2), 0,7455 (R3)
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