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

By FXstreet.com | Updated 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."

You May Also Like

Related Forex Analysis
  1. Forex News

    EUR downside supported at 2014 low - FXStreet

  2. Forex News

    Caution Holding Euro, USD, and Yen Positions as Borrowing Costs Rise

  3. Forex News

    Fed has restored investor’s confidence - FXStreet

  4. Forex News

    GBP/USD consolidates daily gains

  5. Forex News

    EUR/USD downside fully exposed

Trading Center