30 Jan 2014
Flash: GBP/USD set to challenge key support on EM woes - FXStreet
FXstreet.com (Barcelona) - Valeria Bednarik, FXStreet Chief Analyst notes that the world finally realizes tapering is for real, and Wall Street is on a tear since the year started, accelerating its losses this Wednesday when the FED not only announced a $10B tapering, but also stated it will cut another $10B next February.
Key Quotes
"Investors are also pulling money from EMs’ funds, an estimated of more than $7B so far for this January, sinking currencies all across the world. Finally Chinese PMI contracted down to 49.5 past Asian session, fueling risk aversion and safe haven dollar demand."
"As for the GBP/USD, weak money supply in the UK put the pair under selloff mode, trading now at a fresh 6 day low barely above 1.6450, with the 4 hours chart showing a strong bearish tone, as price extends below 20 SMA and indicators head lower below their midlines; a key support is now 200 EMA in the mentioned time frame at 1.6430. Some consolidation and even an upward correction should be expected if the pair fails to break below it on a first attempt, yet once below, the bleeding should extend towards 1.6370 support."
"Immediate resistance stands around 1.6470, followed by 1.6520 price zone. Only above this last the bearish pressure should ease albeit seems pretty unlikely for now."
Key Quotes
"Investors are also pulling money from EMs’ funds, an estimated of more than $7B so far for this January, sinking currencies all across the world. Finally Chinese PMI contracted down to 49.5 past Asian session, fueling risk aversion and safe haven dollar demand."
"As for the GBP/USD, weak money supply in the UK put the pair under selloff mode, trading now at a fresh 6 day low barely above 1.6450, with the 4 hours chart showing a strong bearish tone, as price extends below 20 SMA and indicators head lower below their midlines; a key support is now 200 EMA in the mentioned time frame at 1.6430. Some consolidation and even an upward correction should be expected if the pair fails to break below it on a first attempt, yet once below, the bleeding should extend towards 1.6370 support."
"Immediate resistance stands around 1.6470, followed by 1.6520 price zone. Only above this last the bearish pressure should ease albeit seems pretty unlikely for now."