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18 Feb 2014
GBP/USD bouncing back
FXStreet (Guatemala) - GBP/USD broke below the $1.67 level after UK’s January CPI came lower than expected in Europe, falling to a low of 1.6658,but it has since regained the 1.67 handle although lacks conviction above 1.6710.
The global currency team at Brown Brothers Harriman explained, “The CPI in January fell 0.6% m/m, and brought the y/y rate to 1.9% from 2.0%. It was expected to be unchanged, with risks to the upside. The recent peak was 2.9% last June. The core rate, which excludes alcohol, tobacco, food and energy, fell to 1.6% from 1.7%. It was expected to have ticked up to 1.9%, and is now the lowest since June 2009. The news helps bolster the BOE's case for rates being on hold for longer. The June 14 short sterling futures contract has edged higher (lower rates) to record new 8-month highs, while the March 15 contract has recovered almost 2/3 of what it had lost since last week's Quarterly Inflation Report, the growth upgrade, and forward guidance adjustment. Sterling itself held above last Friday's lows (~$1.6645) on the pullback, before recovering back to $1.6700. Immediate resistance is seen near $1.6740”.
GBP/USD Levels
The 20 DMA is 1.6502. The 50 DMA is 1.6445 and the 200 DMA is 1.5874. RSI (14) reads 55.04. Supports are ascending from 1.6623, 1.6644, 1.6667 and1.6694. Spot is 1.6704 while resistances are 1.6757, 1.6796, 1.6823 and 1.6845.
The global currency team at Brown Brothers Harriman explained, “The CPI in January fell 0.6% m/m, and brought the y/y rate to 1.9% from 2.0%. It was expected to be unchanged, with risks to the upside. The recent peak was 2.9% last June. The core rate, which excludes alcohol, tobacco, food and energy, fell to 1.6% from 1.7%. It was expected to have ticked up to 1.9%, and is now the lowest since June 2009. The news helps bolster the BOE's case for rates being on hold for longer. The June 14 short sterling futures contract has edged higher (lower rates) to record new 8-month highs, while the March 15 contract has recovered almost 2/3 of what it had lost since last week's Quarterly Inflation Report, the growth upgrade, and forward guidance adjustment. Sterling itself held above last Friday's lows (~$1.6645) on the pullback, before recovering back to $1.6700. Immediate resistance is seen near $1.6740”.
GBP/USD Levels
The 20 DMA is 1.6502. The 50 DMA is 1.6445 and the 200 DMA is 1.5874. RSI (14) reads 55.04. Supports are ascending from 1.6623, 1.6644, 1.6667 and1.6694. Spot is 1.6704 while resistances are 1.6757, 1.6796, 1.6823 and 1.6845.