28 Oct 2013
GBP/USD turbulence resumes the downside
FXstreet.com (London) - GBP/USD has remerged into this week on the offer following on from Friday’s declines through 1.6240 support.
The pair is down over 100 pips from Friday's move and of all the GBP related events last week, strategists at RBS said they consider the comments made by BoE Deputy Governor Bean to be the most important. “This is because he is the first BoE official to raise the prospect of the MPC moving the current 7% unemployment rate threshold under certain circumstances. While his comments came with the usual caveats and conditions, and is crucially subject to the Bank's estimate of the degree of spare capacity in the economy, the fact that an MPC member is opening talking about the threshold target says to us that it shouldn't be ignored…to some extent the BoE's unemployment forecasts have lost some credibility given the somewhat odd profile in the latter quarters of the forecast and this may negate the market reaction to any forecast change. For choice, we would still expect GBP to benefit from any significant change to the forecast profile”. Later today, the BoE’s Dale will be speaking at 10:20am EST, as the market collects any last minute sentiment into the November Inflation Report.
GBP/USD Levels
The 20 DMA is 1.6099, the 50 DMA is 1.5899 and the 200 DMA is 1.5480. RSI (18) reads 56.98. Supports are ascending from 1.6076, 1.6110, and 1.6138. Spot is currently 1.6146 while resistances are 1.6180, 1.6260, 1.6310, 1.6380 and 1.6421.
The pair is down over 100 pips from Friday's move and of all the GBP related events last week, strategists at RBS said they consider the comments made by BoE Deputy Governor Bean to be the most important. “This is because he is the first BoE official to raise the prospect of the MPC moving the current 7% unemployment rate threshold under certain circumstances. While his comments came with the usual caveats and conditions, and is crucially subject to the Bank's estimate of the degree of spare capacity in the economy, the fact that an MPC member is opening talking about the threshold target says to us that it shouldn't be ignored…to some extent the BoE's unemployment forecasts have lost some credibility given the somewhat odd profile in the latter quarters of the forecast and this may negate the market reaction to any forecast change. For choice, we would still expect GBP to benefit from any significant change to the forecast profile”. Later today, the BoE’s Dale will be speaking at 10:20am EST, as the market collects any last minute sentiment into the November Inflation Report.
GBP/USD Levels
The 20 DMA is 1.6099, the 50 DMA is 1.5899 and the 200 DMA is 1.5480. RSI (18) reads 56.98. Supports are ascending from 1.6076, 1.6110, and 1.6138. Spot is currently 1.6146 while resistances are 1.6180, 1.6260, 1.6310, 1.6380 and 1.6421.