GBP/USD back above 10-D SMA on DXY weakness, supported by 21-D SMA
GBP/USD has spiked in recent trade despite the lack of positive drivers fromthe UK data this week and instead, the greenback gets wipped cross the board and sterling bulls take full advantage. Currently, GBP/USD is trading at 1.3542, up 0.22% on the day, having posted a daily high at 1.3556 and low at 1.3458.
The pound was quiet in Asia, although fell from 1.3516 to 1.3491 as the dollar firmed up while markets shrugged off the Chinese noise. It wasnt until european traders got on board and took the pound off a cliff to a 13-day low of 1.3474 in early trade when China gave a warning that report on UST may be 'fake news'.
The pound gave way to the aformentioned low when noise around Brexit cemented the offeres where a No deal' Brexit could cost UK about 500,000 jobs, according to the London mayor. However, the dollar tanked in late London and continued to fall on the NY handover with the DXY dropping from 92.50 to 91.78. Poor US inflation at factory levels pushed the greenback to its lowest for this 2018 and near critical breakout points. We now await US CPI and Retail Sales. (ECB's hawkish Minutes helped EUR/USD up to 1.2050).
Key notes so far
- US PPI: services prices decline for the first time in 10 months - Wells Fargo
- Philly Fed: December Manufacturing Index revised up to 27.9 from 26.2
- US: Weekly initial claims was 261,000, an increase of 10,000 from previous week
- US Dollar Index slides further to test monthly lows
- US: So much growth, so little inflation... - ING
- ECB minutes: current monetary policy stance is appropriate
GBP/USD levels
GBP/USD was threatening the 21 day MA (1.3456) with risk toward the 50 day MA in the mid-1.33s. However, the spike back to 1.3520 was bought again and sterling is back into a bullish scenario above the hourly 100 SMA at 1.3536 with an uptuen in RSI on the 4hr sticks and with a firmer footing on the daily sticks while trading back above the 10-D SMA at 1.3534, supported at the 21-D SMA.