On the last trading day of a busy week, dominated by central banks, the US Dollar witnessed a modest recovery. The GBP/USD pair erased the majority of gains recorded in the previous session and is currently quoting around mid-1.3000s. Meanwhile, the EUR/USD once again ran through fresh offers near 1.1250-60 region and is now struggling to hold 1.1200 handles.
On Thursday, the US Dollar extended its post-FOMC sell-off amid mixed US economic data that showed weekly jobless claims dropping to their lowest level since July, while existing home sales fell more than expected. The greenback, however, managed to reverse some of its bearish moves and is seen extending the recovery during Asian session on Friday.
In the absence of any major market moving economic data due for release either from the US or the UK, the focus would be on the preliminary release of Euro-zone PMI prints, which might provide fresh impetus for short-term traders later during the European session.
Technical outlook
Technical indicators have started moving into bearish territory across various timeframes (H1, H4, Daily), suggesting that Thursday's rejection from above 1.3100 handles is likely to get extended further. Hence, a follow through weakness below 1.3030 immediate support is likely to accelerate the slide immediately towards sub-1.3000 support (1.2990-80 area) below which the pair is likely to head towards testing a short-term ascending trendline support near 1.2930 regions.
Meanwhile on the upside, session high near 1.3085-90 zone now seems to act as immediate resistance. Strong bullish momentum above this hurdle would negate bearish bias and assist the pair to surpass weekly high resistance near 1.3120 level towards testing its next major resistance near 1.3190-1.3200 region.
The pair once again failed to extend its bullish momentum and clear its immediate strong supply zone near 1.1250-60 area. With short-term momentum indicators indicating neutral bias, it would be prudent to wait for a decisive break below 100-day SMA support (near 1.1195-90 region) to confirm fresh selling pressure that could take the pair back towards 200-day SMA support near 1.1150 regions. A subsequent weakness below 200-day SMA might continue to find some buying interest near 1.1125-20 region below which the pair is likely to turn vulnerable and continue drifting lower in the near-term.
On the flip side, the pair needs to build on to its momentum back above session high near 1.1210-15 area to make a fresh attempt towards clearing the 1.1250-60 important barrier. Should the pair manage to conquer this strong resistance,, a bout of short-covering should lift the pair immediately towards 1.1300 round figure mark, also coincide with a short-term descending trend-line resistance.
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