27 Jul 2015
GBP/USD: Bulls in control, but maybe not for much longer
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5569 with a high of 1.5596 and a low of 1.5489.
GBP/USD has been on the bid in a weaker dollar environment again, while we await the week to unfold with plenty of data to keep us on our toes. The main focus will come in the FOMC now that the durable goods orders have been reported, surprising to the upside, though but despite that, the dollar continues as offered and allows for the pound and euro to drift higher. In the case of sterling, markets are getting behind the bid in respect of a hawkish rhetoric from Carney and for the fact that a referendum on the EU has now been called for by Cameron over the weekend sooner than the proposed, "Before the end of 2017" date. This should give the manufacturing and the business climate some temporary relief.
GBP/USD volatility to follow
The week ahead will be jam packed for the pair with both UK and US GDP, FOMC and US jobless claims. For the FOMC, this will be the last one before September where surveys suggest that 80% of the economists expect a rate hike from the Fed, but that is not to say that this will be indicated in this meeting around.
Analysts at Brown Brothers Harriman expect, "A non-committal statement on the timing of the liftoff, as Yellen did in her recent Congressional testimony." Also, strategist at Societe Generale, Kit Juckes, expects the Fed to reiterate its neutral stance.
Either way, volatility could be expected in the major over this and other key events this week, starting with the UK GDP Q2 kicking off domestic data for the pound tomorrow. Expectations are for 0.7% QoQ vs 0.4 previous while YoY expectations are 2.6% vs 2.9% previous.
GBP/USD technically bearish
Technically, GBP/USD is making a minor recovery post last week's triple top downside from the recent high of 1.5674 where tough resistance would be expected much higher in a broader bearish trend. Karen Jones, chief analyst at Commerzbank explained that their negative bias remains entrenched and they look for rallies to remain capped by 1.5700 and trigger a slide towards support at 1.5171…"
GBP/USD has been on the bid in a weaker dollar environment again, while we await the week to unfold with plenty of data to keep us on our toes. The main focus will come in the FOMC now that the durable goods orders have been reported, surprising to the upside, though but despite that, the dollar continues as offered and allows for the pound and euro to drift higher. In the case of sterling, markets are getting behind the bid in respect of a hawkish rhetoric from Carney and for the fact that a referendum on the EU has now been called for by Cameron over the weekend sooner than the proposed, "Before the end of 2017" date. This should give the manufacturing and the business climate some temporary relief.
GBP/USD volatility to follow
The week ahead will be jam packed for the pair with both UK and US GDP, FOMC and US jobless claims. For the FOMC, this will be the last one before September where surveys suggest that 80% of the economists expect a rate hike from the Fed, but that is not to say that this will be indicated in this meeting around.
Analysts at Brown Brothers Harriman expect, "A non-committal statement on the timing of the liftoff, as Yellen did in her recent Congressional testimony." Also, strategist at Societe Generale, Kit Juckes, expects the Fed to reiterate its neutral stance.
Either way, volatility could be expected in the major over this and other key events this week, starting with the UK GDP Q2 kicking off domestic data for the pound tomorrow. Expectations are for 0.7% QoQ vs 0.4 previous while YoY expectations are 2.6% vs 2.9% previous.
GBP/USD technically bearish
Technically, GBP/USD is making a minor recovery post last week's triple top downside from the recent high of 1.5674 where tough resistance would be expected much higher in a broader bearish trend. Karen Jones, chief analyst at Commerzbank explained that their negative bias remains entrenched and they look for rallies to remain capped by 1.5700 and trigger a slide towards support at 1.5171…"