GBP/USD to test the March low? - Scotiabank

By FXstreet.com | August 20, 2014 AAA

FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that GBP is strong, outperforming all the majors, but failing to break above the 200‐day MA at 1.6677.



Key Quotes:



The catalyst was the release of the BoE minutes from the August 6/7 meeting, where two members (McCafferty and Weale) voted in favour of a 25bpt interest rate hike. Their reasoning was based on: 1) fall in unemployment and survey evidence of tightening in the labour market could lead to a pick up in wage growth; 2) erosion of spare capacity would like remain rapid; 3) policy would remain supportive even after a 25bpt interest rate hike; 4) delaying a Bank rate increase might increase the risks associated with the first hike."



"GBP/USD short‐term technicals: bearish—all technical studies warn of downside risk but the RSI is only at 31, suggesting there is plenty of downside room before reaching oversold levels. Look for a test to 1.6460, the March low."



comments powered by Disqus
Related Forex Analysis
  1. GBP/USD upside remains corrective – Commerzbank
    Forex News

    GBP/USD upside remains corrective – Commerzbank

  2. USD/CHF shows recovery attempts, as it bottomed at 0.9340
    Forex News

    USD/CHF shows recovery attempts, as it bottomed at 0.9340

  3. SEB:  More EUR/USD buying seen above 1.2943 - eFXnews
    Forex News

    SEB: More EUR/USD buying seen above 1.2943 - eFXnews

  4. GBP/USD Daily Outlook - September 19
    Investing

    GBP/USD Daily Outlook - September 19

  5. USD/CAD at Risk for Larger Downside Correction on Sticky Canada CPI
    Forex News

    USD/CAD at Risk for Larger Downside Correction on Sticky Canada CPI

Trading Center