Back
19 Feb 2014
GBP/USD drops sub 1.67 handle on FOMC minutes
FXStreet (Barcelona) - GBP/USD minutes showed several officials wanted 'clear presumption' in favor of 10 bln cuts to bond buying at each policy meeting. Sterling dropped below the 1.67 handle.
GBP/USD had been claiming back the 1.67 handle approaching into the 1.6730 area post losing a big figure on yet further disappointments from the US economy in Building permits (MoM) and Housing Starts (MoM). Strategists at TD Securities noted we also had the minutes from the 6 February BoE meeting today, and said, “ As expected there wasn’t anything new beyond what we already saw in the QIR and the ensuing MPC media deluge. There was a little more focus on sterling, with the MPC noting that FX strategists had been attributing the appreciation to the stronger UK outlook, but nothing too surprising”. Karen Jones, chief analyst at Commerzbank explained that GBP/USD up move is a little over stretched and the daily RSI has not confirmed the recent 1.6822 high and as a consequence the market is likely to correct lower near term or at least consolidate some of its recent gains. “Ideally the retracement should hold circa 1.6600 (38.2% retracement of the move seen so far in February) for an upside bias to remain, initial support lies 1.6685/67. While we acknowledge that the Elliott wave counts on the daily, weekly and monthly charts indicate that this is the end phase of the move we remain unable to rule out an extension to the 1.7041 2009 peak”
GBP/USD Levels
The 20 DMA is 1.6513, the 50 DMA is 1.6450 and the 200 DMA is 1.5882. RSI (14) reads 58.73. Supports are ascending from 1.6590, 1.6605, 1.6644 and 1.6663. Spot is 1.6681 while resistances are 1.6741, 1.6757, 1.6796 and 1.6823.
GBP/USD had been claiming back the 1.67 handle approaching into the 1.6730 area post losing a big figure on yet further disappointments from the US economy in Building permits (MoM) and Housing Starts (MoM). Strategists at TD Securities noted we also had the minutes from the 6 February BoE meeting today, and said, “ As expected there wasn’t anything new beyond what we already saw in the QIR and the ensuing MPC media deluge. There was a little more focus on sterling, with the MPC noting that FX strategists had been attributing the appreciation to the stronger UK outlook, but nothing too surprising”. Karen Jones, chief analyst at Commerzbank explained that GBP/USD up move is a little over stretched and the daily RSI has not confirmed the recent 1.6822 high and as a consequence the market is likely to correct lower near term or at least consolidate some of its recent gains. “Ideally the retracement should hold circa 1.6600 (38.2% retracement of the move seen so far in February) for an upside bias to remain, initial support lies 1.6685/67. While we acknowledge that the Elliott wave counts on the daily, weekly and monthly charts indicate that this is the end phase of the move we remain unable to rule out an extension to the 1.7041 2009 peak”
GBP/USD Levels
The 20 DMA is 1.6513, the 50 DMA is 1.6450 and the 200 DMA is 1.5882. RSI (14) reads 58.73. Supports are ascending from 1.6590, 1.6605, 1.6644 and 1.6663. Spot is 1.6681 while resistances are 1.6741, 1.6757, 1.6796 and 1.6823.