GBPUSD news - page 45
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GBP/USD forecast for the week of April 20, 2015
The GBP/USD pair shot straight up during the course of the week, but has run into a significant amount of resistance at the 1.50 level. Because of this, we appear that this market is going to seriously press upon the resistance found in that area. However, you have to keep in mind that the 1.50 level of course is important, and will have quite a bit of psychological significance. On top of that, the Friday candle was a shooting star, and it is at roughly the perfect spot. Because of this, we have no interest whatsoever in buying, at least not until we clear the top of the shooting star from four weeks previous. That is essentially the 1.52 level, and it is not until we get above there that we feel the entirety of the resistance barrier is broken. We believe that more than likely short-term traders will lead the way and it will more than likely be difficult for longer-term traders to be involved in.
However, having said that we still believe that the downtrend is without a doubt in effect, so it can be difficult to buy. If we break down to fresh, new low, that of course is a very bearish sign as well and we do believe that more than likely this pair goes down to the 1.45 handle. There are signs of support in the US Dollar Index at the moment right now, as the Friday candle was also a hammer. So having said that, it looks like the US dollar will continue to strengthen overall, which should drive this pair lower.
However, if we did manage to break above the 1.52 handle, we feel that the market would then race directly to the 1.55 level. That area should be massively resistive as well, so we feel that long-term traders will continue to favor the downside as there is a bigger amount of pressure seems to be on the downside at the moment. If we managed to break above the 1.55 handle though, at that point in time you have to think that perhaps the trend has changed.
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GBP/USD Forecast Apr. 20-24
The British pound bounced back in spectacular style last week, as GBP/USD gained over 300 points. The pair closed at 1.4946. This week’s highlight is Retail Sales. Here is an outlook on the major events moving the pound and an updated technical analysis for GBP/USD.
The US dollar took it on the chin last week, as the markets reacted to disappointing US economic reports, including retail sales and housing data. There was better news late in the week as consumer confidence shot higher. The UK continues to struggle with weak inflation, as CPI remained at record low of 0.0% in March.
* All times are GMT
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GBP/USD: Sterling Slides to 1-Week Low on Stronger Dollar
The US dollar strength remained the main driver during the overnight session, sending the cable currency pair to fresh one-week lows.
Sterling fell 0.21% to $1.4864, it's lowest since April 16, with a bearish tone persisting. The buck saw demand overnight across the board, with the US dollar index rising 0.27% to 98.200.
"We remain patiently bullish USD in anticipation of data improvement as we move into Q2. The USD may also regain some momentum as we approach the next week’s meeting, as markets prepare for risk of a more hawkish message (the one-week embargo period begins today). In comments yesterday New York Fed President Dudley continued to emphasize that rate hikes are likely later this year," BNP Paribas wrote in a research note on Tuesday.
New York Federal Reserve (Fed) President William Dudley stated that he remained confident "growth prospects for the US economy over the remainder of 2015 will improve". However, he also added that the "timing of normalization remains uncertain because how the economy evolves is uncertain".
Dudley highlighted the durable nature of the US recovery, expecting growth prospects to improve, supporting lift-off. This provided the greenback with solid support.
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GBP/USD: BOE Minutes Could Determine If 1.50 Ceiling Holds
Like most major currency pairs, GBP/USD has been essentially rangebound for the past six weeks. Over that period, we’ve seen our fair share of disappointing data from both countries and neither currency has been able to rise above the economic mediocrity. On Friday, it seemed as if the pound was finally on the verge of a breakout above the key 1.50 level, but sellers stepped in late in the day to push the pair back down from that key resistance level for the weekly close.
Friday’s big reversal created an ominous Bearish Pin Candle*, or inverted hammer, on the daily chart, hinting that an important daily top may have formed. Bolstering the bearish case, the Stochastics indicator rolled over from overbought territory for the first time since late February. For the record, that previous top preceded a 900+ pip drop down to nearly 1.4600, though that certainly doesn’t mean we’ll see the same outcome this time around.
On the fundamental side of the ledger, traders will zero in on tomorrow’s Bank of England minutes from the April 9th meeting. While the vote was likely 9-0 in favor of keeping monetary policy unchanged, there are some members of the Monetary Policy Committee who are in favor of hiking rates sooner rather than later. Like many central banks, the BOE must decide to what extent the current low inflation readings are due to temporary factors like the drop in oil prices vs. more stubborn, longer-term deflationary forces. If the minutes show that the balance of the MPC still favors the wait-and-see approach, cable bulls could opt to bail on their positions.
While GBP/USD edged higher Tuesday, the medium-term bias will remain to the downside as long as rates stay below key psychological resistance at 1.50. To the downside, traders may target the Fibonacci retracements of last week’s rally at 1.4750 or 1.4670, the 61.8% and 78.6% retracements respectively (not shown). On the other hand, hints of a more hawkish BOE could lead to a bullish breakout and a potential squeeze up toward 1.5200 in short order.
*A Bearish Pin (Pinnochio) candle, or inverted hammer, is formed when prices rally within the candle before sellers step in and push prices back down to close near the open. It suggests the potential for a bearish continuation if the low of the candle is broken.
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GBP/USD: Sterling Edges Higher Ahead of BoE Minutes
The UK pound inched up on Wednesday as market participants prepare to digest the Monetary Policy Committee (MPC) minutes, which are expected to show all of the nine-strong rate-setting committee at the Bank of England (BoE) voted to keep policy unchanged in April.
Sterling traded 0.11% higher at $1.4941 ahead of the release, moving in a narrow range of within 40 pips.
Today’sBoE minutesare likely to be fairly neutral ahead of next month’s vote. "It will be interesting to see whether the committee’s views have changed on the prospects for inflation and wages in light of the more recent data, which has remained fairly positive, throughout the first quarter of this year," Michael Hewson from CMC Markets UK wrote on Wednesday.
The latest official data showed the rate of UK CPI inflation remained stable in March at 0%, despite some expecting a fall below zero. Petrol prices have continued to rise steadily both in March and April, so there is a possibility the UK could eventually avoid the awaited deflation blip in the coming months.
Speaking to the Financial Times on March 25, BoE policymaker David Miles said there were no signs of a downward spiral in prices, despite the current inflation rate dropping to zero for the first time ever on record.
In its March MPC minutes, the policymakers judged that deflationary forces might become more persistent, driven by the risk that divergent monetary policy trends, as well as stronger prospects for growth in the UK than in the euro area, m
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BOE minutes show unanimous 9-0 vote to keep rates, QE on hold
Minutes from the Bank of England's most recent policy meeting released Wednesday showed that the Monetary Policy Committee voted unanimously to keep rates on hold and its quantitative-easing program unchanged.
The minutes showed all nine members were in favor of leaving the key interest rate at a record low of 0.5% and making no changes to the central bank's £375 billion asset-purchase program.
According to the minutes, two members saw the decision as "finely balanced", while all members agreed that the next rate move is likely be an increase.
Most market players expect the BOE to begin slowly raising interest rates in mid-2016.
GBP/USD was trading at 1.4974 from around 1.4944 ahead of the release of the data, while EUR/GBP was at 0.7183 from 0.7197 earlier.
Meanwhile, European stock markets remained lower. London’s FTSE 100 shed 0.55%, the EURO STOXX 50 dipped 0.1%, France's CAC 40 slumped 0.25%, while Germany's DAX declined 0.2%.
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GBP/USD: Cable Breaks Above $1.50 After BoE Minutes
According to the latest Bank of England (BoE) minutes, all nine Monetary Policy Committee (MPC) members voted in favor of the current main refinancing rate, which stands at 0.5%, and unanimously agreed on the amount of QE, which remained at £375 billion.
Cable edged higher after Wednesday's release and was hovering around $1.4972, 0.32% higher on the day. The bearish trend remains intact and focus now turns to US macro data due late in the session.
"The BoE also sees a faster pickup in inflation once the effect of cheap oil and food drops out of CPI calculations towards the end of this year," the minutes said.
The US house price index is expected to tick higher to 0.5% from 0.3%, while existing house sales are predicted to jump to 5.03 million, from 4.88 million previously.
Speaking to the Financial Times on March 25, BoE policymaker David Miles said there were no signs of a downward spiral in prices, despite the current inflation rate dropping to zero for the first time ever on record.
In itsMarch MPC minutes, policymakers judged that deflationary forces might become more persistent, driven by the risk that divergent monetary policy trends, as well as stronger prospects for growth in the UK than in the euro area, might continue to put upward pressure on sterling's exchange rate, primarily versus the euro.
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Increased spending counters poor UK retail numbers
Sales may have fallen in the UK but the wallets are still open
The devil is always in the detail with economic data sometimes and the sales numbers are no different. In a normal, stable price environment that would be a bad number and it would signal potential weakness in the retail sector
Some key numbers show that retails aren't in trouble. Average weekly spending rose to 6.9bn from 6.6bn in Feb and vs 6.7bn last year. In the 5 week reporting period for March it rose 0.6bn against last year
That's not a bad gain considering falling prices. As prices fall spending amounts naturally fall too, so the fact that amounts through the tills rose is actually a good sign
We're in an environment where certain factors may cover up the reality of the data so that's something to bear in mind when assessing the numbers. If I had managed to see the spending numbers a bit quicker I would have looked to jump into a cable long. As it is we've put on a decent gain from the spike lower and are now trading back into 1.50
U.K. Retail Sales Fall Unexpectedly; Budget Deficit Undershoots Target
U.K. retail sales declined for the first time in six months in March on petrol sales, casting doubt over economic growth gaining strength at the start of the year.
Public sector finance data revealed that Chancellor George Osborne undershot the fiscal targets for 2014-15 ahead of the general election on May 7.
Retail sales including auto fuel unexpectedly dropped 0.5 percent on a monthly basis in March, reversing a 0.6 percent rise in February, data from the Office for National Statistics showed Thursday.
This was the first fall in six months and the biggest since January 2014. Economists had forecast a 0.4 percent rise for March.
It looks as though retail sales will provide a much smaller boost to overall GDP in the first quarter than in the fourth quarter, Vicky Redwood, chief UK economist at Capital Economics said. This somewhat increases the chances of a slowdown in overall GDP growth, she added.
Food store sales increased 0.4 percent, while non-food sales slid 0.1 percent from February. Petrol stations reported the biggest fall of 6.2 percent.
Excluding auto fuel, sales advanced 0.2 percent in March from the prior month, slower than February's 0.6 percent increase and the expected growth of 0.5 percent.
On a yearly basis, retail sales including auto fuel expanded 4.2 percent after rising 5.4 percent in February. Sales were expected to grow again by 5.4 percent.
Nonetheless, annual growth continued for the 24th consecutive month, which was the longest period of sustained increase since May 2008.
Meanwhile, growth in sales excluding auto fuel improved to 5 percent from 4.8 percent. But it was weaker than the expected expansion of 5.5 percent.
Another report from the ONS showed that public sector net borrowing excluding interventions decreased by GBP 0.4 billion to GBP 7.4 billion in March. The expected level was GBP 7 billion.
In the financial year ending 2015, PSNB totaled GBP 87.3 billion, a decrease of GBP 11.1 billion compared with the same period in the financial year ending 2014.
This was below the Office for Budget Responsibility's budget forecast of GBP 90.2 billion and GBP 98.5 billion shortfall seen in 2013-14.
At the end of March, public sector net debt excluding public sector banks came in at GBP 1,484.3 billion or equivalent to 80.4 percent of GDP.
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GBP/USD: Lame US Data Serves Sterling; $1.52 Next Offering
The pair extended its bullish momentum of the past two weeks, with the latest impetus coming from a sub-par report on US manufacturers on Friday.
Sterling traded 0.83% higher at $1.5176 on Friday after ascending a mere 15 pips below the $1.52 threshold, as traders jumped on the dollar-shorting bandwagon.
"The dollar weakness was catalyst enough to help the British pound to some of the strongest gains amongst major currencies following the more hawkish than expected Bank of England minutes published earlier in the week," CMC Markets analyst Jasper Lawler said in emailed comments on Friday.
The dollar weakened against most of its peers after a government report showed a key measure of business investment, so called core orders for durable goods, fell for the seventh consecutive month in March. That clouded the strong 4% jump in headline bookings, mainly fueled by greater transportation orders.
The report fell in line with a series of sub-par March macro reports released lately that prompted a turnaround in the GBP/USD, which had slipped below $1.46 for the first time since June 2010 on April 13.
A weakening of economic growth in the US, the reasoning goes, will force the Federal Reserve - due to meet next week - to wait with the first rate hike in almost a decade until a confirmation of a rebound in the economy.
On the other hand, policymakers at the Bank of England were recently more confident about the inflation outlook, the minutes from a meeting earlier this month showed.
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