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19 Aug 2013
GBP/USD bid through 1.5620 support
FXstreet.com (Barcelona) - GBP/USD is bid in London, moving up from 1.5620 support to 1.5640
The major theme in London last week was Sterling’s appreciation against the backdrop of a commitment from Mark Carney to an extended period of low rates in the UK, said research teams at Investc Bank. They continued to say “the Bank of England’s Inflation Report and the introduction of forward guidance has so far satisfied markets that the Bank of England have their house in order, which has allowed investors to pay closer attention to the wave of better than expected economic data. It’s bit of a quieter week for UK data this week but the undoubted highlight will be the second revision of Q2 GDP, although the general consensus is for it to be unrevised at +0.6% quarter on quarter, many believe it could surprise to the upside. Remaining on the economic outlook for now, it was reported in the weekend press that a retail revival across Britain during the sun swept July has given the wider economy a significant boost. We’ve already witnessed the positive effect this had on retail sales last week and it will undoubtedly help Q3 GDP when the first estimate is reported in October. The pound finished the week in fine health, particularly against the US dollar where it has settled in the 1.56’s which is some feat when compared to the average forecast amongst top banks of 1.5000.
The major factor that will threaten the recent rally in GBPUSD is the re-emergence of markets focus on the likelihood of the Fed tapering and this week could spark that interest. The latest FOMC minutes from the US will be released on Wednesday evening and could shed some light on September tapering. Investors have grown wary of the promise of Fed tapering as the summer has progressed but it’s difficult to ignore the impact this theme had on GBPUSD in June (dipping to the 1.48’s) and therefore we will remain vigilant to the possibility of renewed USD strength. It’s interesting to note an article released in the Wall Street Journal today that discusses the possible fractions created in the Fed by Bernanke’s planned departure and the arrival of his successor. Long term, any Fed instability that threatens the credibility of their policy approach will be viewed as dollar negative by markets. Elsewhere, it remains quiet in Europe so we look ahead to any revision to the final German Q2 GDP estimate released this Friday for potential impact on the single currency, whilst we keep one eye on Egypt as the appalling violence continues in the region which is yet to have any significant affect on markets”.
GBP/USD steady but eyes 1.5680 target
20 dma is 1.5396, 50 dma is 1.5347 and 200 dma is 1.5523. RSI (9) reads 69.75. Supports are ascending from 1.5548, 1.5565, 1.5595, 1.5608. Spot is currently 1.5626 while resistances are 1.5680, 1.5709, 1.5723 and 1.5753.
The major theme in London last week was Sterling’s appreciation against the backdrop of a commitment from Mark Carney to an extended period of low rates in the UK, said research teams at Investc Bank. They continued to say “the Bank of England’s Inflation Report and the introduction of forward guidance has so far satisfied markets that the Bank of England have their house in order, which has allowed investors to pay closer attention to the wave of better than expected economic data. It’s bit of a quieter week for UK data this week but the undoubted highlight will be the second revision of Q2 GDP, although the general consensus is for it to be unrevised at +0.6% quarter on quarter, many believe it could surprise to the upside. Remaining on the economic outlook for now, it was reported in the weekend press that a retail revival across Britain during the sun swept July has given the wider economy a significant boost. We’ve already witnessed the positive effect this had on retail sales last week and it will undoubtedly help Q3 GDP when the first estimate is reported in October. The pound finished the week in fine health, particularly against the US dollar where it has settled in the 1.56’s which is some feat when compared to the average forecast amongst top banks of 1.5000.
The major factor that will threaten the recent rally in GBPUSD is the re-emergence of markets focus on the likelihood of the Fed tapering and this week could spark that interest. The latest FOMC minutes from the US will be released on Wednesday evening and could shed some light on September tapering. Investors have grown wary of the promise of Fed tapering as the summer has progressed but it’s difficult to ignore the impact this theme had on GBPUSD in June (dipping to the 1.48’s) and therefore we will remain vigilant to the possibility of renewed USD strength. It’s interesting to note an article released in the Wall Street Journal today that discusses the possible fractions created in the Fed by Bernanke’s planned departure and the arrival of his successor. Long term, any Fed instability that threatens the credibility of their policy approach will be viewed as dollar negative by markets. Elsewhere, it remains quiet in Europe so we look ahead to any revision to the final German Q2 GDP estimate released this Friday for potential impact on the single currency, whilst we keep one eye on Egypt as the appalling violence continues in the region which is yet to have any significant affect on markets”.
GBP/USD steady but eyes 1.5680 target
20 dma is 1.5396, 50 dma is 1.5347 and 200 dma is 1.5523. RSI (9) reads 69.75. Supports are ascending from 1.5548, 1.5565, 1.5595, 1.5608. Spot is currently 1.5626 while resistances are 1.5680, 1.5709, 1.5723 and 1.5753.