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16 Jul 2013
GBP/USD has dropped 30 pips
FXstreet.com (London) - GBP/USD has dropped 30 pips so far o the release on US CPI.
US CPI printed 1.8% vs 1.5% consensus and 1.4% previous. This has reinforced the downside between the pair after the disappointing data release in the UK and a lower than forecasted UK CPI. The pair is supported at 1.5060 for the time being. The pair will continue to be subject to, and probably quite volatile, around the performance of the US economy while Bernanke keeps markets on the edge of their seats in relation the subsequent risks to global markets around the subject of tapering QE. We will hear Bernanke’s semi-annual testimony to US Congress tomorrow. The previous low levels of inflation that many participants are concerned about will likely be addressed in his speech in relation to timings of tapering, as coupled with a high level of unemployment there may be signals that in fact more stimulus is needed.
GBP/USD corrective only
Karen Jones, Chief Analyst at Commerzbank said that GBP/USD’s rebound from support at 1.4854/32 is viewed as corrective only and may already be complete. “The Elliot wave count is implying that this is corrective only and suggests the rally will fail circa 1.5220 ahead of the more important 1.5305 level (50% retracement).” She said provided it does so, attention should revert to the 1.4854/32 support. “Above 1.5305 neutralises the immediate outlook for recovery to the 1.5530/1.5603 band, the 78.6% retracement and 200 day ma”.
US CPI printed 1.8% vs 1.5% consensus and 1.4% previous. This has reinforced the downside between the pair after the disappointing data release in the UK and a lower than forecasted UK CPI. The pair is supported at 1.5060 for the time being. The pair will continue to be subject to, and probably quite volatile, around the performance of the US economy while Bernanke keeps markets on the edge of their seats in relation the subsequent risks to global markets around the subject of tapering QE. We will hear Bernanke’s semi-annual testimony to US Congress tomorrow. The previous low levels of inflation that many participants are concerned about will likely be addressed in his speech in relation to timings of tapering, as coupled with a high level of unemployment there may be signals that in fact more stimulus is needed.
GBP/USD corrective only
Karen Jones, Chief Analyst at Commerzbank said that GBP/USD’s rebound from support at 1.4854/32 is viewed as corrective only and may already be complete. “The Elliot wave count is implying that this is corrective only and suggests the rally will fail circa 1.5220 ahead of the more important 1.5305 level (50% retracement).” She said provided it does so, attention should revert to the 1.4854/32 support. “Above 1.5305 neutralises the immediate outlook for recovery to the 1.5530/1.5603 band, the 78.6% retracement and 200 day ma”.