© Reuters. The Book displays a very strong rally, and leads the Euro in its wake
The Book displays an impressive comeback Wednesday, which more than offset the plunge of more than 150 pips yesterday.
Let us remember that the postponement of the vote on the Brexit Parliament UK had sharply reduced the GBP/USD. The fall also exacerbated when investors have learned that the opposition to UK plans a censure motion against the First Minister Theresa May.
However, this motion of censure, after having worried the markets, now seems doomed to failure, and therefore should change nothing in the framework of the Brexit, that May still plans to renegotiate before they finally present an agreement to Parliament for approval.
The rebound in the GBP might rapidly encounter technical barriers
In this context, the GBP/USD has made a very significant bounce, with a peak at 1.2659, after a low that morning at 1.2477, an increase of almost 200 pips.
From a graphical point of view, it should be noted that this rise in GBP/USD as it allows you to test the moving average 100 hours, currently located at 1.2652, a threshold which may slow the rise. Beyond that, the next resistance is at 1.27, with also the moving average 200 hours just below (1.2696).
EUR/USD took advantage of the rising GBP/USD
The pair GBP/USD has also resulted in the pair EUR/USD in its rise. The Euro-Dollar has indeed marked a peak to daily 1.1379 this afternoon after a low of 1.1306 yesterday evening.
However, only a breakout confirmed above 1.14 would really question the bearish view that has dominated the Euro in the short term. Above 1.14, the next resistances is located next to 1.1420-25, 1.1450, 1.1475 and 1.15.
In case of return of the downside, the first support important to take into account is 1.1350, before 1.1300-1.1306 (low of yesterday), and then 1.1265, 1.1215 (hollow annual) and 1.12.
Finally, it will be recalled that the EUR/USD will be subject to the potential influence of the ECB meeting tomorrow, for which many analysts do not hesitate to anticipate a “turning dovish” in the communication of the ECB, which would weigh on the single currency.