8 Apr 2015
GBP/USD offered on hawkish FOMC minutes
FXStreet (Guatemala) - GBP/USD is currently trading at 1.4870 with a high of 1.4973 and a low of 1.4807.
GBP/USD is diving lower on the back of the release of the FOMC minutes that revealed a split committee in respect of a June rate hike. The hawkish tone was a surprise to a market that was position short in the greenback. The dollar is firmer as it is less unlikely that a rate hike can be simply written off to come as early as June with several members recommending a hike sooner than later.
However, there is support for the pound also in a broader sense, given the cyclical momentum of the UK economy. "The release yesterday of the latest UK services PMI survey supported our expectation that economic growth in the UK will continue to remain strong this year", explained Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ, Ltd who added, " The relative outperformance of the UK economy should continue even as political risk increases in the coming month providing support for the pound and helping to limit downside risk."
Technically, however, there is a bearish sentiment around the pair that brings in the 1.43 level as the 78.6% Fibonacci retracement of the 2009 uptrend meets the 2010 low, as noted by Karen Jones, chief analyst at Commerzbank. "GBP/USD continues to range trade within its March 18 extremes at 1.5148 and 1.4636. "Key resistance remains the 2014-2015 downtrend channel resistance line at 1.5257. While it caps, the down trend will remain intact with the 1.4700 level and also the 1.4636 March low remaining in focus."
GBP/USD is diving lower on the back of the release of the FOMC minutes that revealed a split committee in respect of a June rate hike. The hawkish tone was a surprise to a market that was position short in the greenback. The dollar is firmer as it is less unlikely that a rate hike can be simply written off to come as early as June with several members recommending a hike sooner than later.
However, there is support for the pound also in a broader sense, given the cyclical momentum of the UK economy. "The release yesterday of the latest UK services PMI survey supported our expectation that economic growth in the UK will continue to remain strong this year", explained Lee Hardman at The Bank of Tokyo-Mitsubishi UFJ, Ltd who added, " The relative outperformance of the UK economy should continue even as political risk increases in the coming month providing support for the pound and helping to limit downside risk."
Technically, however, there is a bearish sentiment around the pair that brings in the 1.43 level as the 78.6% Fibonacci retracement of the 2009 uptrend meets the 2010 low, as noted by Karen Jones, chief analyst at Commerzbank. "GBP/USD continues to range trade within its March 18 extremes at 1.5148 and 1.4636. "Key resistance remains the 2014-2015 downtrend channel resistance line at 1.5257. While it caps, the down trend will remain intact with the 1.4700 level and also the 1.4636 March low remaining in focus."