GBP/USD Rebound Stalls at Former Support- Bearish RSI Break in Focus

Talking Points:

- GBP/USD Struggles to Retain Bullish RSI Momentum Ahead of BoE Meeting.

- EUR/USD Retail Crowd Turns Net-Long Ahead of March Despite Bearish Break.

- USDOLLAR Holds Monthly Opening Range Ahead of Preliminary 4Q GDP Report.

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GBP/USD

Chart – Created Using FXCM Marketscope 2.0

• 
  Lack of momentum to break/close above former support zone around 1.5510-1.5550 may highlight a near-term top especially as the RSI struggles to retain the bullish momentum from earlier this year.
  


• 
  Despite expectations of seeing the Bank of England (BoE) retain its current policy at the March 5 meeting, may see a bullish reaction in sterling as Governor Mark Carney continues to prepare U.K. household and businesses for higher borrowing-costs.
  


• 
  A break back below 1.5300 (23.6% retracement) to 1.5320 (78.6% retracement) to negate bullish GBP/USD and raises the risk for a resumption of the bearish trend.
  

EUR/USD

• 
  DailyFX Speculative Sentiment Index (SSI) shows retail crowd has now turned net-long EUR/USD following the slew of U.S. data from earlier this morning; seeing higher opening interest going into the end of the month.
  


• 
  The break of the wedge/triangle favors the approach to ‘sell-bounces’ in EUR/USD as the RSI retains the bearish momentum; may see the European Central Bank (ECB) interest rate decision on March 5 act as a fundamental catalyst for a further decline in EUR/USD should President Mario Draghi show a greater willingness to further embark on the easing cycle.
  


• 
  Close below 1.1185 (23.6% expansion) to 1.1210 (61.8% retracement) raises the risk for fresh yearly lows in EUR/USD.
  

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USDOLLAR(Ticker: USDollar):

Chart – Created Using FXCM Marketscope 2.0

• 
  Dow Jones-FXCM U.S. Dollar looks poised to retain the bullish trend going into March as it holds the monthly opening range, while the RSI threatens the bearish momentum.
  


• 
  Despite the sticky CPI prints, a marked downward revision in the 4Q U.S. Gross Domestic Product (GDP) report may keep the greenback largely range-bound going into the end of the month.
  


• 
  Failure to test 11,721 (38.2%) keeps the bullish setup intact, but need a close below 11,826 (61.8% expansion) to expose the next level of interest around 11,901 (78.6% expansion).
  

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— Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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GBP/USD Rebound Stalls at Former Support- Bearish RSI Break in Focus