4 Feb 2014
GBP/USD becoming a fade?
FXStreet (Guatemala) - GBP/USD is struggling above 1.6300 with supply capping the pair around 1.6340 and sliding right back below the handle.
The UK printed a decent PMI Construction number, 64.6 vs 615 consensus that took the pair in a spike to the highs from 1.63 the figure. Strategists at TD Securities said, “The construction PMI jumped from 62.1 to 64.6 in Jan, reaching its highest level since Aug 2007. After yesterday’s UK manufacturing PMI was a touch softer than expected, and the US ISM dropped quite sharply, this was a reminder that growth prospects in the UK remain quite strong”. However, the spike was just a spike and the territory was a fade. Meanwhile, food for thought, strategists at Rabobank said, “Despite impressive GDP figures, the US economy appears to be losing momentum. It remains unclear how much of this can be attributed to the extreme winter weather. So in the most optimistic scenario, this is only temporary”. With regards to the rate outlook, “While the emerging market turmoil has not altered the Fed’s tapering course, it is affecting USD rates. In conjunction with disappointing domestic data it has led to a decline in the 10y US treasury yield of about 40 bps since the start of the year. The calendar is light today and markets are free to position themselves ahead of the BoE and Non-farm payrolls coming up later on in the week.
GBP/USD Levels
The 20 DMA is 1.6467, the 50 DMA is 1.6415 and the 200 DMA is 1.5824. RSI (14) reads 38.94. Supports are ascending from 1.6168, 1.6198, 1.6220 and 1.6262 Spot is 1.6295 while resistances are 1.6349, 1.6366 and 1.6415.
The UK printed a decent PMI Construction number, 64.6 vs 615 consensus that took the pair in a spike to the highs from 1.63 the figure. Strategists at TD Securities said, “The construction PMI jumped from 62.1 to 64.6 in Jan, reaching its highest level since Aug 2007. After yesterday’s UK manufacturing PMI was a touch softer than expected, and the US ISM dropped quite sharply, this was a reminder that growth prospects in the UK remain quite strong”. However, the spike was just a spike and the territory was a fade. Meanwhile, food for thought, strategists at Rabobank said, “Despite impressive GDP figures, the US economy appears to be losing momentum. It remains unclear how much of this can be attributed to the extreme winter weather. So in the most optimistic scenario, this is only temporary”. With regards to the rate outlook, “While the emerging market turmoil has not altered the Fed’s tapering course, it is affecting USD rates. In conjunction with disappointing domestic data it has led to a decline in the 10y US treasury yield of about 40 bps since the start of the year. The calendar is light today and markets are free to position themselves ahead of the BoE and Non-farm payrolls coming up later on in the week.
GBP/USD Levels
The 20 DMA is 1.6467, the 50 DMA is 1.6415 and the 200 DMA is 1.5824. RSI (14) reads 38.94. Supports are ascending from 1.6168, 1.6198, 1.6220 and 1.6262 Spot is 1.6295 while resistances are 1.6349, 1.6366 and 1.6415.