Wednesday's FX Analysis: Poor GDP Numbers Could Spark GBP Selloff

Wednesday was another relatively quiet day for the markets. Despite poor German IFO numbers, the euro remained well supported, rejecting the 1.2970 level and closing again above the 1.3000 level.

Wednesday afternoon saw U.S. data (Durable) again come in worse than expected. More poor U.S. data is expected, and it continues to put pressure on the USD.

Thursday's early trading sees the UK GDP figures. Similar to the euro, the Pound has remained relatively well supported above the 1.5200 level. A poor GDP number could accelerate a move lower again.

Given relatively poor U.K. data recently, a poor GDP number could easily be on the cards, spurring the final U.K. downgrade by S&P. We could also see talk of a triple dip recession, which in turn could offer a nice EUR/GBP long option which remains supported above the 0.8500 level.

EUR/USD
The euro rejected a move lower again today. We suspect this pair could test the 1.3085 level and weekly pivot point as it continues to chop sideways.
Personal Bias: Bearish
Support: 1.3000 / 1.2970
Resistance: 1.3085 / 1.3170
Break of 1.3000 to offer shorts or short from current levels targeting 1.2730. Look for a close below 1.3000



GBP/USD
The pound consolidated ahead of tomorrow's GDP figures. If the figures come in weak, a break below the 1.5200 level could mean a much bigger move lower, and we could use the break to look for short entries.
Personal Bias: Bearish
Support: 1.5220 / 1.5200
Resistance: 1.5330 / 1.5360
Strategy: Potential short option from Fridays price action, break of the 1.5200 level would confirm the Bearish signal, if the 1.5200 level continues to hold we could see a push higher.

As highlighted above, potential play for poor U.K. GDP numbers could be in the form of a EUR/GBP long play.
The pair has been well supported at the 0.8500 level. If we get poor data, we expect this pair could push higher.



AUD/USD
After an aggressive drop last week, the Aussie chopped around this week, continuing to hold below the 1.0300 level. We are currently sidelined waiting for clear signals from the pair.
Personal Bias: Neutral
Support: 1.0245
Resistance: 1.0350
Strategy: stand aside await clear signals - potential breakout play to the upside if we clear the 1.0350 level.

USD/JPY
The pair failed to move today on light volumes, we continue to like intraday plays off of support levels, we expect the pair to chop around before breaking the 100 level.
Personal Bias: Bullish
Support: 98.70
Resistance: 100
Strategy: Look for long entries off of support.