GBP/USD

At the end of last week, the British currency fell sharply, testing a significant support level at 1.2300. The resumption of the downward trend for the pair became possible after some statements by British officials:

• On Wednesday, Bank of England Governor Andrew Bailey said he expects a strong decline in inflation from next month.
• Dave Ramsden, Deputy Chairman of Markets and Banking, was also quite optimistic, noting that the recently published UK core CPI data was nothing more than a “glitch” in the deflationary process, and risks to sustainability and domestic inflationary pressures were beginning to recede.

After such statements by British officials, expectations for a rate cut on the pound shifted to August, and since the Fed does not plan to cut the rate before September, the GBP/USD pair continues to suffer losses.

GBP/USD technical analysis indicates further development of the downward trend, as the price has consolidated below the alligator lines on higher time frames, the AO oscillator is red and below zero. At the same time, before a new downward impulse, a corrective growth in the direction of 1.2420-1.2400 is possible.

If pound sellers manage to refresh the recent low at 1.2300, the pair could test 1.2220-1.2140.

Important news for today:

• 11.30 (GMT +3:00) - publication of the UK Services Sector Business Activity Index
• 14.30 (GMT +3:00) - speech by Huw Pill, member of the Bank of England Monetary Policy Committee

EUR/USD

The single European currency has been trading in a rather narrow flat corridor of 1.0690-1.0610 in recent days. Long-term eur/usd technical analysis indicates a further decline in the pair, since on higher time frames the price has confidently consolidated below the support in the form of alligator lines. Nevertheless, on the daily time frame we see the green color of the AO and AC oscillators, which may indicate a possible corrective rollback to 1.0720-1.0700.

Important news for today:

• 11.00 (GMT +3:00) - publication of the eurozone manufacturing business activity index (PMI) for April
• 11.15 (GMT +3:00) - speech by Eduard Fernandez-Bollo, member of the Supervisory Board of the European Central Bank

Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.