14 Jan 2014
GBP/USD is licking its wounds after Monday’s sell-off
FXstreet.com (Moscow) - GBP/USD is gradually recovering after hitting fresh weekly low at 1.6346 on Monday; it now is trading around 1.6386 area.
GBP needs to assess the data
Despite the timid attempts to recover the recent losses, GBP still stays under pressure due to adjustment of long GBP/USD positions. In late 2013 market believed the UK economy grew above the official forecasts, and the fundamentals supported the notion. Nevertheless, January brought a lot of disappointment and doubts. Traders reassess the UK growth outlook, and monetary policy expectations, thus reducing the number of GBP longs. Today’s release of inflation data may be the key for the pair moves. If this time CPI falls below the BOE 2 per cent target rate, it will give the MPC another argument to continue with accommodative policy. In this case the pair may resume the slide with the initial target at 1.6325 support level.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6418, with support below at 1.6325 (S1), 1.6255 (S2) and 1.6162 (S3), with resistance above at 1.6488 (R1), 1.6581 (R2), and 1.6651 (R3). Hourly Moving Averages are bearish, with the 200SMA at 1.6445 and the daily 20EMA flat at 1.6418. Hourly RSI is neutral at 38.
GBP needs to assess the data
Despite the timid attempts to recover the recent losses, GBP still stays under pressure due to adjustment of long GBP/USD positions. In late 2013 market believed the UK economy grew above the official forecasts, and the fundamentals supported the notion. Nevertheless, January brought a lot of disappointment and doubts. Traders reassess the UK growth outlook, and monetary policy expectations, thus reducing the number of GBP longs. Today’s release of inflation data may be the key for the pair moves. If this time CPI falls below the BOE 2 per cent target rate, it will give the MPC another argument to continue with accommodative policy. In this case the pair may resume the slide with the initial target at 1.6325 support level.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6418, with support below at 1.6325 (S1), 1.6255 (S2) and 1.6162 (S3), with resistance above at 1.6488 (R1), 1.6581 (R2), and 1.6651 (R3). Hourly Moving Averages are bearish, with the 200SMA at 1.6445 and the daily 20EMA flat at 1.6418. Hourly RSI is neutral at 38.