From today’s early trading hours we can see a weakening U.S. dollar. From a forex trading technical point of view the weakening should be continued for the rest of the day.
Today’s macroeconomic data should have an impact on usd behavior. Inflation data will be announced in the zone Euro later on during the trading hours. Preliminary data for January (projected increase from 0.9% to 1.2% y / y). Later on a data will be released on the U.S. gross domestic product in the fourth quarter. The growth of 4.5% is expected.
On EURUSD we see slight move upwards towards the upper border of the descending channel. It provides together with 38% of the abolition of the recent wave of declining, a clear resistance level.It is located at a height of 1.4020, and it might be tested today.
Key levels of support, which also might be tested by bounce of the resistance, lie at the level of 1.3910 (the last recent low).
On the GBPUSD chart, yesterday’s false break of the upper band of the four hour chart resulted, as usual with a strong movement in the opposite direction. In the afternoon, a rate fell back to lower arm of the symmetrical triangle. Currently cable is moving slowly upward and again it can test the upper arm of the triangle (the resistance zone at the height of 1,6220-1,6235)
However, in this context, according to forex trading technical principles, that the current rise is the fifth wave inside the triangle, we probably see the breakout to the down side in nearest future.
Such scenario will be valid after a break of the lower band of the triangle in the area of support 1,6110-1,6100 and 1.6075 (broken confirmation)
According to forex trading daily charts if we see break signal to the downside, we could see further significant drop in cable in coming weeks.
Target level is visible on daily charts – support of 1.5830 area. It is possible that cable will drop even lower after that.
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