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14 Feb 2014
GBP/USD pressing for yearly highs
FXStreet (Barcelona) - ="">GBP/USD is currently heading towards the May 20011 high, 1.6747, scoring 1.6744 so far on a spike.
Investec dealers said, “…The next key technical level is in the mid 1.67’s and opinion is split about whether the pound can continue to soar higher. Some argue it will retrace back into the range back down towards 1.6260 whilst other analysts have the view that a close in the high 1.66’s this evening will trigger more interest in Sterling buying, which could drive it higher”. As mentioned, there are risks that the market is getting ahead of itself as much of sterling’s recent rally has been bought about by expectations of a rate hike coming sooner than what was first anticipated. Strategists at RBS explained, “The BoE's abandonment of explicit forward guidance prompted a 'hawkish' reassessment of rate expectations. However, in the coming week, we expect a unanimous set ofrong>MPC Minutes and CPI inflation remaining anchored at its 2% target to serve as a reminder that the first Bank Rate hike is some way off (we stick with our Q3 2015 forecast, with risks of an earlier move in H1 2015). In terms of the labour market data, the focus will shift towards wider gauges of slack as well as wage inflation as a leading indicator for future inflation – anaemic wage inflation should also help to temper rate hike expectations”.
GBP/USD Levels
The 20 DMA is 1.6472, the 50 DMA is 1.6431 and the 200 DMA is 1.5860. RSI (14) reads 79.06. Supports are ascending from 1.6550, 1.6572, 1.6594, 1.6623. Spot is 1.6726 while resistances are 1.6747 (2011 highs) and 1.6804.
Investec dealers said, “…The next key technical level is in the mid 1.67’s and opinion is split about whether the pound can continue to soar higher. Some argue it will retrace back into the range back down towards 1.6260 whilst other analysts have the view that a close in the high 1.66’s this evening will trigger more interest in Sterling buying, which could drive it higher”. As mentioned, there are risks that the market is getting ahead of itself as much of sterling’s recent rally has been bought about by expectations of a rate hike coming sooner than what was first anticipated. Strategists at RBS explained, “The BoE's abandonment of explicit forward guidance prompted a 'hawkish' reassessment of rate expectations. However, in the coming week, we expect a unanimous set of
GBP/USD Levels
The 20 DMA is 1.6472, the 50 DMA is 1.6431 and the 200 DMA is 1.5860. RSI (14) reads 79.06. Supports are ascending from 1.6550, 1.6572, 1.6594, 1.6623. Spot is 1.6726 while resistances are 1.6747 (2011 highs) and 1.6804.