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GBP/USD extends recovery, takes-out hourly 200-SMA

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 1, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The ongoing recovery in GBP/USD pair found fresh legs earlier in Asia and now extends higher towards 1.43 handle, having taken-out 200-SMA at 1.4257.

    GBP/USD aims to regain 5-DMA


    The GBP/USD pair trades 0.14% higher at 1.4263, flirting with fresh session highs reached at 1.4266 few minutes ago. The cable keeps its recovery mode intact from 1.4150 region and remains firmer, completely unperturbed by the weak China data-led risk-aversion wave that knocked-off higher-yielding assets such as the Antipodeans, oil, equities and industrial metals.

    Moreover, the GBP/USD pair is benefiting from broad based US dollar weakness as markets continue to assess the recent streak of downbeat US macro data and its impact on the Fed rate hike outlook. Last Friday’s advance GDP report showed that the US economic growth slowed sharply in Q4 2015, expanding at 0.7% y/y.

    Markets now await the UK manufacturing PMI for fresh cues on the major ahead of the BOE’s ‘Super Thursday’ later this week. The UK manufacturing PMI is seen heading slightly lower to 51.8 from 51.9 recorded in December.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4300/07 (round number/ 20-DMA), above which 1.4341 (Jan 19 High) would be tested. On the flip side, support is seen at 1.4200 (psychological levels) below which it could extend losses to towards 1.4171/47 (Jan 26 & 29 Low).
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