The week's kickoff was rather mild as currencies were trading in a tight range in the Asian session with an evident upside bias for the US dollar. The day starts with new expectations for the week and new signals for the economy with the lack of data from major economies, restricted only to the UK's final revision to the first quarter GDP.
The market is mainly going to depend on the sentiment and the expectations for the week ahead following a rather hectic week, especially if the UK GPD does meet expectations and remains unrevised with 0.3% expansion. The dollar is already reclaiming some of its losses after the heavy decline seen last week, were the dollar index is trading among the high of 84.27 and the low of 83.95 currently hovering around 84.22.
As for the euro, it was trading in a tight range versus the dollar among the high of 1.2587 and the low of 1.2645; currently around 1.2597 among 1.2570 and 1.2610 levels. Momentum indicators over hourly basis signal the possibility for a positive crossover from oversold areas; this is also seen over four-hour basis as the pair is also trading in oversold areas. Nonetheless, over the wider time span the pair continues to trade lower reversing from overbought areas over daily basis.
Regarding sterling, the pound has dropped versus the dollar and trading at critical areas around 1.50 levels which might be the key for extending the decline ahead of the GDP. So far the pair set the high of 1.5077 and the low of 1.5000 and currently around 1.5021. Momentum indicators over hourly, four-hour, and daily basis are in overbought areas and that signals the likelihood for the pair to continue to head south.
The Japanese yen was also softer versus the dollar. The USDJPY pair recorded the high of 89.14 and the low of 88.78 and currently around 89.07 among 88.95 and 89.50. Momentum indicators linger within overbought areas and that signals the possibility for the pair to reverse lower if it managed to return below 88.30-20 areas.