7 Aug 2013
GBP/USD fading after failed test of 1.5435 level; BOE report looms
FXstreet.com (Barcelona) - The GBPUSD runs the risk of cascading lower yet again after it ran up to “correction resistance” and failed. The BOE’s inflation report and Mr. Carney’s appearance before Parliament are sure to create a sharp move.
GBP/USD has spent the last three days rallying on data
The GBP/USD cross rallied sharply on Dollar weakness following Friday’s jobs report in the US. The bullish tone carried over into Sunday night’s open and continued to stair-step higher until just after Britain’s industrial and manufacturing production numbers were released. Shortly after those numbers came out, the GBP/USD began to sell off – this time in a stair-step pattern in the opposite direction. So far, there is still a chance that the latest bit of selling is just a correction lower leading up to the next thrust higher. But, technicians say that a break below 1.5213 would put out any bullish flame.
Coming into Wednesday’s key quarterly inflation report from the Bank of England and Tuesday morning, the afore-mentioned 1.5213 support and the 1.5435 resistance will be the critical levels to watch. The next big move in GBP/USD will occur after a break and close through either level. Clearly, the inflation report and any guidance from Carney have the potential to effectuate such a break.
GBP/USD technical outlook
The technical crowd is calling for a continued intermediate-term move lower in GBP/USD– at least down to 1.4800 (from 1.52687 currently). Shorter-term resistance for GBP/USD comes in at the 1.5435 macro “correction resistance”. Support for GBP/USD comes in at 1.5213 – the pivot low from Friday afternoon - and is followed by Friday’s low of 1.5102.
GBP/USD has spent the last three days rallying on data
The GBP/USD cross rallied sharply on Dollar weakness following Friday’s jobs report in the US. The bullish tone carried over into Sunday night’s open and continued to stair-step higher until just after Britain’s industrial and manufacturing production numbers were released. Shortly after those numbers came out, the GBP/USD began to sell off – this time in a stair-step pattern in the opposite direction. So far, there is still a chance that the latest bit of selling is just a correction lower leading up to the next thrust higher. But, technicians say that a break below 1.5213 would put out any bullish flame.
Coming into Wednesday’s key quarterly inflation report from the Bank of England and Tuesday morning, the afore-mentioned 1.5213 support and the 1.5435 resistance will be the critical levels to watch. The next big move in GBP/USD will occur after a break and close through either level. Clearly, the inflation report and any guidance from Carney have the potential to effectuate such a break.
GBP/USD technical outlook
The technical crowd is calling for a continued intermediate-term move lower in GBP/USD– at least down to 1.4800 (from 1.52687 currently). Shorter-term resistance for GBP/USD comes in at the 1.5435 macro “correction resistance”. Support for GBP/USD comes in at 1.5213 – the pivot low from Friday afternoon - and is followed by Friday’s low of 1.5102.