7 May 2015
GBP/USD correctingand headed towards 1.5200
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5216 with a high of 1.5254 and a low of 1.5162.
GBP/USD is trying to recover from the start of May's losses. In fact, sterling has been on the back foot since April 13, when the euro bottomed and this current dollar correction began, as noted by Brown Brothers Harriman.
"Since then, sterling is the third worst performer in the majors and has seen the EUR/GBP cross climb to multi-month highs. The FTSE has also lagged YTD, up only 5% vs. 16% for the DAX and 14% for the Euro Stoxx 600. Will this underperformance end after the election? Probably not, if a weak coalition is the outcome." The analysts added that the underperformance has also been driven in part by softer UK data. "Until the outlook becomes clearer, sterling will have to fight headwinds that are both political and economic."
Technically, the pair has some room to go to the upside until a real bullish case will emerge. The key zone would be around the1.5570 resistance that would open up the1.5785 December peak and then 1.5855/80, which is the November 2013 low and 50 % retracement. There after, Karen Jones, chief analyst at Commerzbank explained, "Currently we are unable to rule out a move towards the 1.5898/1.5964 55 and 200 week moving averages." To the downside, the April lows would likely bring srtong support at 1.4562.
GBP/USD is trying to recover from the start of May's losses. In fact, sterling has been on the back foot since April 13, when the euro bottomed and this current dollar correction began, as noted by Brown Brothers Harriman.
"Since then, sterling is the third worst performer in the majors and has seen the EUR/GBP cross climb to multi-month highs. The FTSE has also lagged YTD, up only 5% vs. 16% for the DAX and 14% for the Euro Stoxx 600. Will this underperformance end after the election? Probably not, if a weak coalition is the outcome." The analysts added that the underperformance has also been driven in part by softer UK data. "Until the outlook becomes clearer, sterling will have to fight headwinds that are both political and economic."
Technically, the pair has some room to go to the upside until a real bullish case will emerge. The key zone would be around the1.5570 resistance that would open up the1.5785 December peak and then 1.5855/80, which is the November 2013 low and 50 % retracement. There after, Karen Jones, chief analyst at Commerzbank explained, "Currently we are unable to rule out a move towards the 1.5898/1.5964 55 and 200 week moving averages." To the downside, the April lows would likely bring srtong support at 1.4562.