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GBPUSD advanced on the first trading day of the week after falling more than 1% on Friday’s trading. The British Pound took full advantage of the easing demand for the U.S. Greenback. The 25 basis point interest rate hike by the BoE is poised to ease soaring inflation in the U.K.; however, the slowing British economy poses longer-term threats to the Pound. U.S. existing home sales figures will be released during the American session and should provide a gauge of the real estate market and the overall economic health of the U.S. public.
On the technical side, GBPUSD met fresh resistance at around the 1.239 price region. The 1.2 support level remains firmly intact. RSI for Cable sits at 43.26, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.25944, 1.239
Support: 1.2173, 1.20824
EURUSD traded higher on the first trading day of the week. The German CPI came in above expected at a 1.6% increase, month over month. Last week’s ECB conference presented a more hawkish outlook for the Eurozone’s monetary policy; however, while leaving negative interest rates could ease the soaring inflation, market participants should still be aware of the slowing economy and price pressures from global commodities. ECB’s president Lagarde is due to speak during today’s European trading session.
On the technical side, EURUSD has rebounded from our previously estimated support level of 1.04035 and is on a gradual downtrend despite last week’s positive correction. RSI for the pair sits at 51.69, as of writing. On the four-hour chart, EURUSD is currently trading below its 50, 100, and 200-day SMA.
Resistance: 1.05483, 1.07691
Support: 1.04036, 1.03783
USDJPY continued its upward movement on the first trading day of the week. Following a 2.04% gain from last Friday, USDJPY has continued to inch towards its previous high. The losing demand for the U.S. Greenback did not affect the overall movement of USDJPY as the Japanese Yen continues to depreciate against the U.S. Dollar. The benchmark U.S. 10-year Treasury yield currently sits at 3.231%. On the economic docket, the U.S. is due to release its initial jobless claims figures on Thursday and Fed chair Jerome Powell will speak later on the same day.
On the technical side, USDJPY has rebounded strongly from our previously estimated support level of 132.5 and is closing in our estimated resistance level of 135.5. RSI for the pair has once again reached overbought territory and sits at 65.98, as of writing. On the four-hour chart, USDJPY is currently trading above its 50, 100, and 200-day SMA.
Resistance: 135.56
Support: 133.5, 132.5
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