19 Aug 2015
GBP/USD bulls take charge post dovish FOMC minutes
FXStreet (Guatemala) - GBP/USD is currently bid on the back of dovish FOMC minutes, trading with a high back on the 1.57 handle.
GBP/USD rallied from the mid pint of the 1.56 handle as the minutes were not favouring an immediate rate hike, with many FOMC members on the fence in respect to timings of a rate hike and when wages will begin to accelerate and whether the development of wage prices might translate in to price inflation. There were even some downside risks to inflation from some members while the conditions for firming rates have not been achieved yet.
GBP/USD upside open on dovish FOMC minutes
This leaves the dollar vulnerable to the downside and removes the idea that a September rate hike is on the cards. The pound is relishing in this environment and minds can be cast back on the recent CPI's for the UK that have been supporting the chatter of a BoE rate hike in 2016. This coupled with The CPI's for the US today that were in line with 0.2% on a yearly basis, while core prices – excluding Food and Energy costs – came in at 1.8% on a year to July, leaves the doves and bulls disappointed and 1.57 vulnerable.
Technically, the 200 week moving average at 1.5864 would be a target if the barrier at 1.5720 and 1.5800 psychological level is taken out with conviction and that would likely expose the 1.5930 June highs. Failures at the upside open the 1.5424 current August lows and the 200 day moving average at 1.5371.
GBP/USD rallied from the mid pint of the 1.56 handle as the minutes were not favouring an immediate rate hike, with many FOMC members on the fence in respect to timings of a rate hike and when wages will begin to accelerate and whether the development of wage prices might translate in to price inflation. There were even some downside risks to inflation from some members while the conditions for firming rates have not been achieved yet.
GBP/USD upside open on dovish FOMC minutes
This leaves the dollar vulnerable to the downside and removes the idea that a September rate hike is on the cards. The pound is relishing in this environment and minds can be cast back on the recent CPI's for the UK that have been supporting the chatter of a BoE rate hike in 2016. This coupled with The CPI's for the US today that were in line with 0.2% on a yearly basis, while core prices – excluding Food and Energy costs – came in at 1.8% on a year to July, leaves the doves and bulls disappointed and 1.57 vulnerable.
Technically, the 200 week moving average at 1.5864 would be a target if the barrier at 1.5720 and 1.5800 psychological level is taken out with conviction and that would likely expose the 1.5930 June highs. Failures at the upside open the 1.5424 current August lows and the 200 day moving average at 1.5371.