19 Jun 2015
GBP/USD: consolidating in a narrow range – Scotiabank
FXStreet (Barcelona) - Eric Theoret, CFA, CMT, Currency Strategist at Scotiabank, notes that GBP/USD is quiet, consolidating within a relatively narrow range following Thursday’s rally to fresh multi-month highs, with short-term technicals pointing towards a bullish outlook.
Key Quotes
“This week’s developments have provided for a material shift in the balance of risk to the BoE outlook, firming expectations of policy normalization as market participants responded to the combination of wage-focused BoE minutes concurrently released alongside strong wage data with weekly earnings climbing to a 6-year high.”
“BoE MPC members Forbes’ subsequent speech highlighting the resilience of domestically generated inflation (DGI) also helped to reinforce a modestly hawkish bias. OIS are pricing in a 48% chance of a rate hike over the next 12 months.”
“GBPUSD short-term technicals: bullish—RSI is stabilizing at overbought threshold of 70 and MACD is flattening out. We see limited support before 1.5650 with resistance above 1.5950.”
Key Quotes
“This week’s developments have provided for a material shift in the balance of risk to the BoE outlook, firming expectations of policy normalization as market participants responded to the combination of wage-focused BoE minutes concurrently released alongside strong wage data with weekly earnings climbing to a 6-year high.”
“BoE MPC members Forbes’ subsequent speech highlighting the resilience of domestically generated inflation (DGI) also helped to reinforce a modestly hawkish bias. OIS are pricing in a 48% chance of a rate hike over the next 12 months.”
“GBPUSD short-term technicals: bullish—RSI is stabilizing at overbought threshold of 70 and MACD is flattening out. We see limited support before 1.5650 with resistance above 1.5950.”