June 18, 2018
Last week, on Wednesday pair slipped approx. 200 pips which was the biggest daily downfall of the year and a bearish engulfing candlestick has been formed on the daily technical chart. Earlier after making a low of 1.3203 level bulls tried to managed and we have seen some reaction but due to Fed announcement related to interest rate pair tumbled down and all bulls were dominated by bears.
Odds are in favor of bears and intraday bias remains bearish on the pair as long as 1.3500 level remains intact. Well below 1.3200 level we will see further weakness in the pair and bears will move down further. Well the way bears are reacting it seems like they are not in a mood to stop early, they are approaching the 1.3100 level atleast and bears will make a fresh low of this years.
Inflation in the UK remained steady at 2.1% in May, which means that the BOE that will have its monetary policy meeting next Thursday, will probably maintain the status quo, leaving rates unchanged and with no rate hikes in the foreseeable future, which may result in further Pound weakness.
The ECB pledged to maintain current rates through the Summer of 2019 and included other dovish comments. In addition, US retail sales beat expectations with +0.5% in the control group. Fed chair Powell expressed optimism about the economy and he was somewhat more cautious about the economy.
A twisted bearish crossover on MACD indicator is supporting the bears and RSI is also favoring the bulls from positive territory. The 1.3100 is immediate support level followed by 1.3000 level whereas 1.3500 level is immediate resistance level followed by 1.3600.
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