23 Jan 2014
GBP/USD is ambitious, but 1.66 is so far unreachable
FXstreet.com (Moscow) - GBP/USD still looks quite aggressive, though the 1.66 levels weren’t reached yet; the pair retraced from Wednesday high at 1.6586 to current 1.6559.
The Pound need to have a rest
We hoped for the better than expected UK unemployment data, but it was above all expectations. The 7.1 per cent level is a 5-year low, coming too close to the BOE target level, and supporting the idea of stable recovery of the British economy. However, there are some flies in the ointment. First, the MPC is not ready to change monetary policy so soon. Second, the inflation is weakening. And third, the level of average salary is below the inflation rate. The last two factors say the economy still needs stimulus, and the BOE understands it, and investors understand that, thus the further rise of the pound is limited by January highs around 1.66 area. Today we may see some correction to 1.6539 support level, but the further downside is currently ruled out. Most probably the pair will spend the day within 50-pip range of 1.6540-1.6590.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6539, with support below at 1.6489 (S1), 1.6401 (S2) and 1.6351 (S3), with resistance above at 1.6627 (R1), 1.6677 (R2), and 1.6765 (R3). Hourly Moving Averages are bullish, with the 200SMA at 1.6429, and the daily 20EMA bullish at 1.6434. Hourly RSI is neutral at 61.
The Pound need to have a rest
We hoped for the better than expected UK unemployment data, but it was above all expectations. The 7.1 per cent level is a 5-year low, coming too close to the BOE target level, and supporting the idea of stable recovery of the British economy. However, there are some flies in the ointment. First, the MPC is not ready to change monetary policy so soon. Second, the inflation is weakening. And third, the level of average salary is below the inflation rate. The last two factors say the economy still needs stimulus, and the BOE understands it, and investors understand that, thus the further rise of the pound is limited by January highs around 1.66 area. Today we may see some correction to 1.6539 support level, but the further downside is currently ruled out. Most probably the pair will spend the day within 50-pip range of 1.6540-1.6590.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6539, with support below at 1.6489 (S1), 1.6401 (S2) and 1.6351 (S3), with resistance above at 1.6627 (R1), 1.6677 (R2), and 1.6765 (R3). Hourly Moving Averages are bullish, with the 200SMA at 1.6429, and the daily 20EMA bullish at 1.6434. Hourly RSI is neutral at 61.