Subscribe to RSS

GBP/USD Forecast: Lower highs pattern continues, Eyeing 1.4980?

GBPUSD

The USD made a sharp comeback in the NY session on Friday; courtesy of which the GBP/USD pair fell to 1.5187 levels. The weak close marked the continuation of the “lower highs and lower lows” formation/falling channel formation seen on the daily chart.

Fed normalization begins today?

The closed meeting of the Board of Governors of the Federal Reserve System is scheduled today and the only matter under consideration is “Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.”

USD could rally on a discount rate hike

The discount rate (rate at which the commercial banks borrow money from the Fed. It is not really a discount rate, but a premium over the Fed funds rate) hike was discussed in a similar closed meeting held in September, where 8 of the 12 regional Fed banks called for a discount rate hike. The number could strengthen further in favour of a discount rate hike to near unanimous levels today.

It would be a sign that the normalization process has begun and the Fed is set to hike rates at the Dec 16 meeting. This could trigger a last led upwards in the USD index. It means the GBP/USD pair could extend losses to 1.5087 (61.8% of Apr-Jun rally).

Technicals – Eyes 1.4980

Sterling’s fall on Friday marked a continuation of the lower highs pattern seen on the daily chart since late August. The turn lower was once again triggered after a failure to sustain above the 61.8% of the previous fall; in this case 1.5497-1.5027. The daily RSI has failed to rise above 50.00 and once again turned lower. Overall, the chart says the pair is likely to extend losses to 1.4980-1.4960 (falling channel support). The pair may not find much support at 1.5087 (61.8% of Apr-Jun rally), given the bearish formation on the daily chart. On the higher side, only a daily close 1.5248 (50% of Apr-Jun rally) could see bulls make a comeback and shift risk in favour of a rise to 1.5338 (200-DMA).

EUR/USD Analysis: Eyes Fed’s decision on discount rate

EURUSD

The EUR/USD pair fell on Friday to 1.0640 and extended losses to 1.06 in Asia as Draghi stressed on readiness to do more in order to counter low inflation and faltering Eurozone economic recovery. His comments pushed the German 2-yr yield to a fresh record low. The odds of a ECB announcing more stimulus at the Dec 3rd meeting increased further at a time when the Fed is widely expected to raise rates.

Focus on German data and Fed meeting

From now till Dec 3rd, any German/EZ data if weaker-than-expected, would only add to the bearish pressure on the EUR, since it would confirm Draghi’s view of a faltering economic recovery. On the other hand, a better-than-expected data may lead to a minor technical recovery. However, such a move would also depend on the reaction in the equity markets. In case, the equities cheer the positive Eurozone data, the EUR may not be able to see even the minor corrective rallies.

However, all the scenarios of the Eurozone data and its impact on the EUR could take a back seat in case the Fed raises the discount rate today. It would be a sign that the normalization process has begun and would be a ready by the markets as the Fed pre-committing to a liftoff in December. Consequently, the EUR and other major would take a hit against the USD.

Technicals – Bearish below 1.0616

Euro’s failure to sustain above the 4-hour 50-MA on Friday, followed by a sharp drop to 1.06 keeps the odds in favour of a drop to 1.0587 (trend line support – Nov 6 low-Nov 18 low). An hourly close below 1.0587 would open doors for a drop to 1.0463 (yearly low).

However, the RSI is oversold and continues to form higher lows as compared to the lower lows formation on the price chart. Consequently, a technical correction could to the 4-hour 50-MA at 1.07 cannot be ruled out.

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

15% Forex Welcome Deposit Bonus Up to $1000 – XM

15% Forex Welcome Deposit Bonus Up to $1000 – XM(0)

15% Forex Welcome Deposit Bonus Up to $1000 and $30 Forex No Deposit Bonus Welcome Bonus brings Real Account clients the best rewards available. Entering the markets and trading with XM enables you to earn from your trades and build your own bonus up to a maximum of $1,000. Link:  $30 Forex No Deposit Bonus

Free $200 Earn with Binary No Deposit Bonus – Ayrex

Free $200 Earn with Binary No Deposit Bonus – Ayrex(0)

Earn $200 Free with Binary Options No Deposit Bonus to all new activated trading account. Ayrex presents its very first Binary Options No Deposit Bonus for new traders. Sign up to get FREE $30 and turn them into a fully withdrawable $200! Link: $200 Earn with No Deposit Bonus Link:  $100 Free Win in Just One

$30 Free No Deposit Welcome Bonus Campaign – Tickmill

$30 Free No Deposit Welcome Bonus Campaign – Tickmill(0)

$30 Free No Deposit Welcome Bonus Campaign to All new traders. $30 Free Welcome Account is available to all new clients who expressed a wish for it during the registration process. Link:  $30 Free Welcome Bonus Offer Available to: All new traders Ending Date: 31 December 2017 Bonus Offer: $30 Free No Deposit Welcome Bonus

Get $2017 No Deposit Hot Bonus Promotion – FreshForex

Get $2017 No Deposit Hot Bonus Promotion – FreshForex(0)

$2017 No Deposit Hot Forex Bonus Offer to all new verified customers. The $2017 Hot No Deposit Forex Bonus offers you a unique opportunity to test trading strategies of FreshForex Link:  $2017 No Deposit Hot Bonus offers Available to: All New Traders. Ending Date: 30 April 2017 Bonus Offer: $2017 No Deposit Exclusive Hot Bonus

100% Real Money Cash Back Bonus Promotion – UFX

100% Real Money Cash Back Bonus Promotion – UFX(0)

100% Real Money CashBack Promotion 2018 to all new and existing clients. Join and gain exclusive access to the ONLY online trading 100% Cashback rewards bonus program Link:  100% Real Money CashBack Promotion Link:  $50 Forex No Deposit Bonus Promotion Available to: All new trading account Ending Date: 31 December 2017 Bonus offer: 100% Real

$15 Cashback Rebate Bonus per Lot Traded – FBS

$15 Cashback Rebate Bonus per Lot Traded – FBS(0)

$15 Cash back Rebate Forex Bonus per Lot Traded to All new traders. $15 Cashback Rebate Forex Bonus service is unavailable for the clients, who registered their accounts via their partners. Link:  $15 Cashback Rebate per Lot Traded Link:  100% Forex Deposit Bonus Promotion Link:  100% Forex Deposit Bonus Promotion Available to: All new traders

100% Easy Welcome Deposit Bonus Promo – Trade12

100% Easy Welcome Deposit Bonus Promo – Trade12(0)

Free Daily Forex Trading Signals via SMS. EMAIL. SKYPE. WHATSAPP and 100% Easy Welcome Deposit Bonus Promo to your Live Trading Account, Free E-Books Link:  Free Daily Forex Trading Signals Link:  Get 100% Welcome Deposit Bonus Link:  Get Forex Free E-Books Available to: All new clients Ending Date: 31 December 2017 Bonus Offer: Get 100%

$50 Forex Free No Deposit Bonus Promo Action – FortFs

$50 Forex Free No Deposit Bonus Promo Action – FortFs(0)

$50 Forex Free No Deposit Bonus Promo Action to all eligible clients. Every client who passed the verification process in their trader’s room can get the $50 Forex Free No Deposit Bonus Promo Action Link: $50 Forex No Deposit Welcome Bonus Link: Up to 50% Bonus of Every Deposit Link: 15% Support Margin Bonus Promo

Get 25% Trading Credit Bonus up to $5000 – HYCM

Get 25% Trading Credit Bonus up to $5000 – HYCM(0)

25% Forex Trading Credit Bonus Promo available on your Deposits. Experience Some of HYCM New Features, Services and Offers Receive 25% Forex trading credit bonus Link:  25% Trading Bonus on your Deposits Ending Date:  31 December 2017 Available to:   New Clients only Bonus Offer: 25% Forex Trading Bonus Promo Available on your deposits to New Clients

100% Bonus to your first Deposit Up to $300 – AvaTrade

100% Bonus to your first Deposit Up to $300 – AvaTrade(0)

100% Bonus Limited Time Offer to your first deposit Up to $300. Start trading today and in honour of our Irish roots we’ll give you a St. Patricks Day special bonus of up to 100% Link:  100% Special Bonus to Your First Deposit Available to: All new account Ending Date: 31 December 2017 Bonus offer:

read more

Forex Featured Broker

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories