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GBP/USD supported at strong 38.2% fib level

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 7, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - GBP/USD has stabilized after a sell-off from the 1.51 handle to test the support base made up of the 200 SMA and 100 SMA on the 1hr time frame. The 38.2% fib at 1.5057 is also located in this cluster.

    The mood seems to be with FOMC in the absence of anything domicile from the UK for the pound until the BoE minutes and official industrial and construction output data for a Q4 month later this week and the greenback is under demand exposing the downside in Sterling. Carney is speaking currently at the European Parliament ECON Committee, but so far nothing pertinent has been said while the event is immersed in regulatory matters - we await the BoE.

    Analysts at RBS suggested not to expect anything material from this event, "The BoE's November Inflation Report conveyed little sense of urgency around the monetary policy outlook." However, Ross Walker, Senior UK Economist at RBS said the main interest will centre on the first official industrial and construction output data for a Q4 month.

    GBP/USD levels

    Technically, Karen Jones, Head of FICC Technical Analysis at Commerzbank, expects these pullbacks in the pair to remain supported around 1.5060/30. Valeria Bednarik, chief analyst at FXStreet coupled that view and explained "In the 4 hours chart, the price holds a few pips above its 20 SMA, while the technical indicators have turned flat well above their mid-lines, limiting the downside." On the same time frames, the price is below the 200 SMA at 1.5203 and has been in a down-trend since Nov 19 from 1.5334 and downside pressures will be expected to persist until a break of the 4hr 200 SMA before a retest of the 1.53 handle.
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