GBP/USD slightly bid after FOMC minutes

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    GBP/USD is slightly bid on the back of the mixed FOMC minutes for January. Else where there are little changes in markets given there is nothing new here that Yellen did not recently testify.

    FOMC minutes highlights

    The minutes explained oil, China, the dollar and financial markets in the context of a still strong labour market are a risk. Falling oil prices will keep inflation in check, but lower energy to consumers could offset the negative impact. The US dollar weighing on the manufacturing sector. Financial markets were the biggest concern of all. Tighter financial conditions are pushing up market volatility and creating downside risks to the economy. However, the economy is stronger than markets are suggesting. Monetary policy is data dependent.

    Meanwhile and earlier, we got a mixed outlook on the UK's labour market from the data. We had the December quarter unemployment rate rising to 5.1% (5.0%) expected. However, the unemployment is still back to near recent historic lows, but there are still signs of upward pressure on pay, as noted by analysts at Scotiabank.

    GBP/USD levels

    The market recently broke below the 20 day ma at 1.4393 that might have alleviate upside pressure for a retarget of 1.4078 recent lows in 2016."The 1.3502 January 2009 low remains our primary target medium term," explained Karen Jones, chief analyst at Commerzbank."Above 1.4665, the March 2013 low cuts in at 1.4832 and the 23.6% retracement of the move down from the 2014 peak cuts in at 1.4816. We would expect this to hold," she added.
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