Euro surged through the 1.4200 level before settling in an upper range for the rest of the day. Some USD strength was seen on the back of increasing long term US interest rates. Looking ahead, April Unemployment Rate is forecast at 9.1% vs. 8.9% previously. fresh .Sterling got right to work in Europe surging towards above 1.6400 to test 1.6500 before running out of steam. GBP/JPY and EUR/GBP also helped to propel the currency higher. Reasons for the recent demand for GBP are linked to the size of selling in 2008 and the recovery of the banking industry and the effect this has had on the UK economy. Looking ahead, April Mortgage Approvals are forecast at 41k vs. 39k previously.
Technical Outlook:
EURO chart pattern is indecisive only break below 1.4120 can confirm the bear trend.. Currency is expected to trade in the range of 1.4050-1.4230 levels. Daily Momentum and stochastic are seen trending down. Relative strength is also supporting the downside correction It is expected to take support at 1.3980.Resistance is seen at 1.4260 levels. Euro is trading above the moving average hinting that long term bull trend remains intact.
GBP chart pattern is expected to trade in the range of 1.6260-1.6560 levels for the day. Momentum is seen trending down and the Relative strength index is also trading at overbought areas hinting towards the possibility of downside correction to 1.6130 level;s .Key resistance for the currency is seen at 1.6580 levels. Caution required as the market holds above the moving average and parabolic is also holding the bull note for long term.
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