29 Apr 2015
GBP/USD: Dropping on optimistic Fed and profit taking
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5419 with a high of 1.5499 and a low of 1.5326.
GBP/USD dropped circa 40 pips on the FOMC statement and is offered on the back of profit taking that came in bullish for the economy despite the Q1 GDP miss earlier in the day, albeit subject to revisions.
The statement was however pretty much in line with what the street was expecting. The Fed let us know that the rates are on hold and jobs are very key for a lift off this year. They said that the economy is weaker for reasons that will fade but were not clear with what they were. One minute lower oil prices are good for the economy while now it appears that this has not been the case.
Big question marks are left hanging over the US economy still even while the Fed have scrambled to offer a statement that did as little damage as possible while they wish to sit back and wait to see how things turn out, relying on households, wage growth and consumer spending to pass through to high inflation in 2016.
Thus, they remain optimistic although June is off the table but they are not writing off a hike this year. Technically, there is still scope for the 1.5550/70 zone and this is the February high and the 38.2% retracement of the move down from the July 2014 peak. as noted by Karen Jones, chief analyst at Commerzbank. "This is expected to hold the topside."
GBP/USD dropped circa 40 pips on the FOMC statement and is offered on the back of profit taking that came in bullish for the economy despite the Q1 GDP miss earlier in the day, albeit subject to revisions.
The statement was however pretty much in line with what the street was expecting. The Fed let us know that the rates are on hold and jobs are very key for a lift off this year. They said that the economy is weaker for reasons that will fade but were not clear with what they were. One minute lower oil prices are good for the economy while now it appears that this has not been the case.
Big question marks are left hanging over the US economy still even while the Fed have scrambled to offer a statement that did as little damage as possible while they wish to sit back and wait to see how things turn out, relying on households, wage growth and consumer spending to pass through to high inflation in 2016.
Thus, they remain optimistic although June is off the table but they are not writing off a hike this year. Technically, there is still scope for the 1.5550/70 zone and this is the February high and the 38.2% retracement of the move down from the July 2014 peak. as noted by Karen Jones, chief analyst at Commerzbank. "This is expected to hold the topside."