Recap: After a very bearish weeks, the price continued its descent on Monday after breaching the 1.40000 level and eventually closed below the psychological level 1.39500. On Tuesday the price consolidated between the range of 1.39-1.40 and closed above 1.39500. This has prompt the price to continue upward to retest the 1.40000 on Wednesday. However it failed to break above 1.40000 and it bounce back below 1.39500. This has prompt the price to move downwards towards the 1.39000.
On the H4 Chart it can be seen that the price has move towards the 1.39000 before being bounced back strongly toward the 1.40000 resistance. However it was unable to breakthrough the resistance as the buying power fades off and continue the bearish descent. On Friday the price descent sharply to the psychological level 1.37500 before showing sign of rejection as the bears took a rest.
Technical: The price has printed a strong bearish candlestick as it fell sharply from 1.39000 to 1.37500. A break below 1.37500 would brings the price towards the previous swing low 1.37150. If it were to found support there it would possibly bounce off and retest the resistance at 1.38000. Consequently if the support failed to hold, a break below the swing low would prompt the price to fall off the price range and descent towards 1.36000. On the upside, a close above 1.38000 would brings the price to possibly retest the 1.38500 & 1.39000.
Fundamentals: The pair has been losing strength due to the combination of UK's disappointing GDP and US's positive data. The price has also dropped below a Major Support at 1.40000, indicating the bears would soon take control of the market. In the coming weeks, news & data releases on both US and UK would provide more impetus to decide the direction of the market, on whether would there be a strong reversal or a continuation of bearish movement. However it is highly unlikely for a reversal to happen as the market sentiment has started to turn bearish after the BoE drop hints that a rate hikes on May will be unlikely due to disappointing UK's data. This change in sentiment has trigger the selloff as the previous bulls run has been power off mainly by the anticipated rate hikes on May.
Verdict: Bearish. Pay attention to news releases on the upcoming weeks. Pullback is likely. Reversal is unlikely.
Technical: The price has printed a strong bearish candlestick as it fell sharply from 1.39000 to 1.37500. A break below 1.37500 would brings the price towards the previous swing low 1.37150. If it were to found support there it would possibly bounce off and retest the resistance at 1.38000. Consequently if the support failed to hold, a break below the swing low would prompt the price to fall off the price range and descent towards 1.36000. On the upside, a close above 1.38000 would brings the price to possibly retest the 1.38500 & 1.39000.
Fundamentals: The pair has been losing strength due to the combination of UK's disappointing GDP and US's positive data. The price has also dropped below a Major Support at 1.40000, indicating the bears would soon take control of the market. In the coming weeks, news & data releases on both US and UK would provide more impetus to decide the direction of the market, on whether would there be a strong reversal or a continuation of bearish movement. However it is highly unlikely for a reversal to happen as the market sentiment has started to turn bearish after the BoE drop hints that a rate hikes on May will be unlikely due to disappointing UK's data. This change in sentiment has trigger the selloff as the previous bulls run has been power off mainly by the anticipated rate hikes on May.
Verdict: Bearish. Pay attention to news releases on the upcoming weeks. Pullback is likely. Reversal is unlikely.