Is The British Pound Making A Comeback?

• 18 Aug 2017

EUR/GBP

Momentum appears to declining for Euro buyers especially against the British Pound. Price action has broken the 20-period exponential moving average to the downside, which had been acting as a support line for the pair. Its worth noting however, price action has broken the moving average once previously, with prices snapping back in a bullish direction. Momentum indicators confirm a lack of conviction from Euro buyers as RSI heads towards the 50 threshold and MACD begins its descent towards the zero line.

Impact event: Eurozone current account data will be released at 11:00 GMT+3, impacting Euros pairs.

GBP/USD

Following the theme of GBP recovery, the GBP/USD pair appears to be turning more bullish and is currently testing the 1.290 price level along with the 20-period EMA. Volume has been rising into the bullish move which could indicate there is still some buying interest for the Pound. Momentum indicators are mixed; with MACD following an upward trajectory however, RSI has flattened below the 50 threshold. Clearly, a break of the 1.39 price level is required to confirm the bullish momentum, with the next price target at 1.297.

USD/JPY

The USD/JPY pair has hit a resistance line (most significant on the daily chart) at the 109.25 price level which has been followed by a bullish candle in the current trading session. Dollar weakness also appears to have been a theme most notably in yesterday’s trading session.  RSI has brushed the 30 oversold zone and appears to be heading in a bullish direction. MACD has a downward trajectory but has yet to cross the zero line. Declining volume indicates less interest from Yen buyers and as a result there may be a bullish reversal for the USD/JPY.

USD/CHF

Dollar weakness has pushed USD/CHF prices close to previous lows at 0.959. However, the pair appears to have found support at the 0.961 price level. Again, momentum indicators are mixed with RSI beginning an upward trajectory and MACD crossing the zero line to the downside. MACD however, is a lagging indicator. Declining volume indicates that there is a lack of conviction to push prices in either direction with the pair likely to trend between the 0.961 and 0.965 price levels.

Impact event: Prelim UoM Consumer Sentiment report at 17:00 GMT+3, will likely affect dollar pairs.