By the end of Thursday the dollar after a pause, continued its growth. The U.S. currency strengthened on positive economic data. Under pressure was not only the single currency, but other major currencies such as the British pound, Australian dollar, Swiss franc and Japanese yen. Today, on Friday also waiting for data on the U.S. labor market, which will add to the volatility of the market.
The EUR/USD after rising to a level of 1.32 was not able to gain a foothold above. Moving up from the very beginning it looked difficult. The focus of the players had a press conference of the ECB, which M. Draghi spoke about the weakness of the euro area economy, also discussed the lowering of interest rates. M. Draghi also said that interest rates will remain at current or lower levels for a long time. In general, the ECB press conference had a negative result on a pair EUR/USD, however, the positive news from the U.S. supported the dollar. In just a couple of hours the single currency has lost about 100 points. We believe that the massive decline of the euro is already upon the market and target the level of 1.30 . By the strong negative trends can be largely self-talk that in the long term, the euro is moving to a level of 1.28 .
The British pound rose initially, contributed to the growth of the report of the Bank of England, but at the end of the day down against the dollar, which got a boost from economic data. However, GBP/USD is even capable of continued growth. At the moment, the British pound is trading back above the 1.56 level. We do not exclude the possibility of the growth to the level of 1.57 and may be slightly higher. With the development of such a scenario, we recommend selling the pound. If you look at the daily chart, we can see that the growth of the MACD indicator does not keep up with the price, maybe the market is formed by the divergence. Previous signal divergence (EUR/USD, USD/CHF) worked yourself 100 %. We will monitor developments and keep you informed of the change of price for the pair GBP/USD. Support for the pound is at 1.56, resistance at 1.57 there is a tendency to increase.Social button for Joomla