Markets should have behaved calmly yesterday as the economic calendar was empty. However, euro and pound showed growth after an interview with Isabel Schnabel was released.

Schnabel said current data prompts another 50 basis point rate hike from the ECB, fueling demand for euro, and in turn, pound.

Now, an attempt to rebound can be seen in the market, but it seems that it will be quite modest and short-lived as after the opening of the US trading session, dollar will weaken again. The reason for that is the data on the US housing market, particularly the pace of housing price growth, which should slow down from 5.3% to 3.9%. New home sales are also likely to decrease by 0.5%.

EUR/USD is back to the local highs in the medium-term, and is overbought in the short-term. This is likely to lead to a retracement or stagnation unless the price holds above 1.1080.

GBP/USD has been moving sideways, particularly in the range of 1.2350/1.2550. The recent momentum has pushed the quote to the upper limit, but no changes are observed. Thus, the situation remains the same, unless there is a breakdown of one or both limits.