25 Mar 2014
GBP/USD eases from highs
FXStreet (Edinburgh) - After climbing to session peaks near 1.6540, the GBP/USD is now deflating to the area of 1.6520/15.
GBP/USD rebounds from 1.6460
The pair is advancing for the second consecutive session so far, down almost 4-big figures since ytd peaks beyond 1.6820 in early February. Extreme positioning, big movements in the M&A space and some late ‘dovishness’ from the BoE have all collaborated in the downside. Today’s UK inflation figures came in mixed and help just a little to keep the GBP afloat, with headline CPI advancing at an annual pace of 1.7% in February, down from 1.9% from the previous month. “With inflation contained it provides some room for the BoE to be patient before entering its rate hiking cycle. Markets are pricing in a 75% probability of an interest rate hike within the next 12 months; we expect the first rate hike in Q115; which should help support GBP against USD but see GBP rally against the EUR”, suggested Camilla Sutton, Chief FX Strategies at Scotiabank.
GBP/USD levels to watch
At the moment the pair is up 0.04% at 1.6506 and a break above 1.6536 (high Mar.24) would open the door to 1.6550 (55-d MA) and finally 1.6570 (high ar.20). On the flip side, the initial support lines up at 1.6460 (low Mar.24) followed by 1.6453 (38.2% of 1.5854-1.6823) and then 1.6425 (low Feb.12).
GBP/USD rebounds from 1.6460
The pair is advancing for the second consecutive session so far, down almost 4-big figures since ytd peaks beyond 1.6820 in early February. Extreme positioning, big movements in the M&A space and some late ‘dovishness’ from the BoE have all collaborated in the downside. Today’s UK inflation figures came in mixed and help just a little to keep the GBP afloat, with headline CPI advancing at an annual pace of 1.7% in February, down from 1.9% from the previous month. “With inflation contained it provides some room for the BoE to be patient before entering its rate hiking cycle. Markets are pricing in a 75% probability of an interest rate hike within the next 12 months; we expect the first rate hike in Q115; which should help support GBP against USD but see GBP rally against the EUR”, suggested Camilla Sutton, Chief FX Strategies at Scotiabank.
GBP/USD levels to watch
At the moment the pair is up 0.04% at 1.6506 and a break above 1.6536 (high Mar.24) would open the door to 1.6550 (55-d MA) and finally 1.6570 (high ar.20). On the flip side, the initial support lines up at 1.6460 (low Mar.24) followed by 1.6453 (38.2% of 1.5854-1.6823) and then 1.6425 (low Feb.12).