GBP/USD: Neutral ahead of possible downside break - RBS

By FXstreet.com | July 28, 2014 AAA

FXStreet (Bali) - Paul Robson, Senior FX Strategist at RBS, notes that the current stance on the Sterling is neutral ahead of a possible downside break of technical trend line support.

Key Quotes

"We are neutral GBP this week ahead of a possible downside break of technical trend line support in GBP/USD. A confirmed break will most likely need a USD kicker driven by a gradual shift to a more hawkish Fed."

"The narrative is whether inflation pressures are set to build more quickly than the Fed expects. Policy is more data-dependent than at any time since the start of the financial crisis."

"Whatever the Fed’s estimate is for spare capacity, a larger than expected rise in employment revealed in Friday’s US payrolls report would add to such concerns."

"Friday’s US core PCE data, the Fed’s preferred measure of inflation, will be important as it will inform on the jumping off point for the Fed’s inflation forecasts. On balance, we see this week’s events playing USD positive."

comments powered by Disqus
Related Forex Analysis
  1. Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...
    Forex News

    Weekly Trading Forecast: FX Traders Prepare for Heavy Volatility on FOMC, GDP and ...

  2. Trading Video: EURUSD Traders Buckle Up for FOMC, ECB Stress Tests, Risk Trends
    Forex News

    Trading Video: EURUSD Traders Buckle Up for FOMC, ECB Stress Tests, Risk Trends

  3. US Session recap: USD consolidation ahead of FOMC
    Forex News

    US Session recap: USD consolidation ahead of FOMC

  4. A market in a technical snap-shot - RBS
    Forex News

    A market in a technical snap-shot - RBS

  5. GBP/USD sitting pretty despite lower CPI’s
    Forex News

    GBP/USD sitting pretty despite lower CPI’s

Trading Center