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GBP/USD: reclaims the 1.53 handle ahead of FOMC minutes

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Oct 8, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - GBP/USD is currently trading at 1.5308 with a high of 1.5373 and a low of 1.5259.

    GBP/USD has picked up the pace over the past couple of hours trading on the bid from below 1.5280 resistance and making a score onto the 1.53 handle testing the 20 SMA and supported by the 50 SMA.

    There was a dovish tone from the BoE, although there was not much of a surprises there. votes were 8-1 to keep Bank Rate on hold and 9-0 to maintain the current level of QE. what the market sold into was the fact that the Monetary Policy Summary and minutes painted a less urgent picture to raise rates, with a lower forecast for inflation and a possible shift in the perceived timing between policy rate changes and inflation.

    "We remain comfortable with our forecast of a May 2016 Bank Rate hike, but clearly the risks are now biased towards the second half of the year rather than earlier," explained analysts at TD Securities.

    We now await the FOMC minutes. The analysts at TD Securities explained, "We expect the market to take the minutes as dovish even though the report should continue to reinforce the hawkish policy bias of the Committee towards a 2015 liftoff in rates, as the market will either see the minutes as stale overall, or even if there are explicit hurdles to hiking this year presented, the recent data is likely going to be seen as not meeting those thresholds."

    GBP/USD levels

    Technically, immediate resistance can be seen between the July low and the 200 day moving average at 1.5322/30. Beyond there comes the 1.5424 early August low through recent highs. to the downside, the 50 SMA at 1.5274 comes as a support ahead of key 1.5107 recent lows below the 1.5190 supporting area and 200 SMA.
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