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The breakout from the falling channel came after the US Fed held interest rates steady at 0.5% and said it now expects to raise them just twice this year (in December it was talking about 4 hikes in 2016). After a dovish FOMC announcement, note that the tone of language is now likely to become more hawkish.
Technically, we note cable has come back to test the trend line from which it broke out last week. This is currently holding as support, but there’s a chance we could see pressure from more Fed speakers this week as well as the ongoing Brexit debate and political goings on in the UK. A pull back into the falling channel would be a bearish signal and see the GBP back to its weakening ways. If support holds, however, bulls will eye 1.46 again and perhaps 1.47 for Aug 2015 falling restistance.
GBP/EUR is losing momentum in the battle against its 50-day MA, not helped by some USD strength. Potential for the pair to be consolidating into a downwards channel. Mario Draghi must be wondering what’s going on.
the pair is heading for a test of 1.2750 with 10 Mar falling highs adding to downside pressure. A break below support will serve to reassure bears that we do indeed have a falling channel in play and put 1.2645 as a potential target, while bulls are hopeful of a bounce back up to 1.28.
EUR/USD continues to trend upwards with fed-induced USD weakness helping make the EUR even stronger. May 2014 falling resistance was breached last week and the pair is currently consolidating once more just below 1.13, which coincides with the high of the day on 9 Feb. Bulls will salivate if we get back to those levels, but with a falling resistance line connecting the highs since mid-Oct, bears will be tempted to bet on a pullback all the way to 1.0822 support in a sideways channel.
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