18 Feb 2014
GBP/USD dreams of 1.68, but trades at 1.6730
FXStreet (Moscow) - GBP/USD is trying to recover the yesterday losses, though for now it only managed to reach 1.6740 session high.
The pound needs higher inflation
GBP moved more than usual in Asia, but with no news of direct relevance it maintained a tight range day, ticking a little higher towards 1.6740. Yesterday, the cable stumbled reaching 1.6821 high and meeting sellers’ interest that brought the pair back to Friday’s levels. The strong fundamental environment in UK is a serious argument in favor of further pair rise. However, we need to take into consideration the fact that the BOE is not planning any tightening this year, thus the scope of rate expectations pricing-in is limited. Moreover, the scheduled for release today CPI numbers may only undermine the belief in pound’s strength, as the index is now within the targeted range, and may even come out below 2.0% level. If so, wait for another wave of sell-off with initial target at 1.6659 support level.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6741, with support below at 1.6659, 1.6612 and 1.6530, with resistance above at 1.6788, 1.6870, and 1.6917. Hourly Moving Averages are bullish, with the 200SMA at 1.6512, and the daily 20EMA bullish at 1.6511. Hourly RSI is neutral at 55.
The pound needs higher inflation
GBP moved more than usual in Asia, but with no news of direct relevance it maintained a tight range day, ticking a little higher towards 1.6740. Yesterday, the cable stumbled reaching 1.6821 high and meeting sellers’ interest that brought the pair back to Friday’s levels. The strong fundamental environment in UK is a serious argument in favor of further pair rise. However, we need to take into consideration the fact that the BOE is not planning any tightening this year, thus the scope of rate expectations pricing-in is limited. Moreover, the scheduled for release today CPI numbers may only undermine the belief in pound’s strength, as the index is now within the targeted range, and may even come out below 2.0% level. If so, wait for another wave of sell-off with initial target at 1.6659 support level.
What are today’s key GBP/USD levels?
Today's central pivot point can be found at 1.6741, with support below at 1.6659, 1.6612 and 1.6530, with resistance above at 1.6788, 1.6870, and 1.6917. Hourly Moving Averages are bullish, with the 200SMA at 1.6512, and the daily 20EMA bullish at 1.6511. Hourly RSI is neutral at 55.