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GBP/USD at fresh Feb highs

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 18, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    GBP/USD has been quite a show this week. Making new highs today for the month.

    James Knightley, analyst at ING Bank explained that the Bank of England voted unanimously to leave Bank Rate at 0.5% and the size of the asset purchase facility at £375bn.

    "It is very interesting that the BoE have decided to finally express a view on Brexit with ”Leave” campaigners likely to be up in arms that they have come off the fence. The BoE acknowledge that the Brexit vote has weighed on sterling and may “also delay some spending decisions and depress growth of aggregate demand in the near term”. This is nothing more than stating the obvious, but it could be the first step into what could become a more concerted campaign to highlight the economic risks."

    Meanwhile, tuning to next week, analysts at TD Securities explained that after an uneventful Bank of England meeting, they expect an uneventful inflation number this week." Core inflation in February likely repeated January’s 1.2% y/y print, while the headline measure likely remained unchanged at 0.2% y/y. While this is below the Bank of England’s recent 0.5% estimate, the downside miss largely reflects declines in oil prices seen after they completed their forecast."

    GBPUSD levels

    GBP/USD made fresh high of 1.4515 for Feb however, it faces the twin perils of 1.4568, the April 2015 low and the 1.4665 February 2016 high and is expected to struggle, as suggested by Karen Jones, chief analyst at Commerzbank. On the wide, she explained, "Support at 1.4083, the 21st January low guards the 1.3837 end of February low.
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