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20 May 2014
GBP/USD settles at mid-range
FXStreet (Córdoba) - The GBP/USD is consolidating minor daily gains at the beginning of the American session after the latest rally attempt faltered following UK CPI figures.
The GBP/USD reached a 6-day high of 1.6863 immediately after inflation data, with the annual CPI growing by 1.8% versus 1.7% expected, but stalled at the 50% retracement of the 1.6995/1.6732 and pulled back. With the subsequent dip being contained by the 1.6820 zone, the pair steadied in a range over the last hours and it is currently trading at 1.6827, still up 0.10% on the day.
"After a strong start to the month, sterling has lacked real direction in recent sessions. The pound remains the best performing developed world currency on a 12 mth view but last week's publication of the BoE's Quarterly Inflation Report put paid to further upside. The Report was accused of being dovish", said Jane Foley, Senior Currency Strategist at Rabobank International. "We maintain the view that the Bank’s tone has been consistent for some time but that it appeared dovish mostly because market expectations regarding the timing of the first BoE rate hike of the cycle has become overly optimistic".
GBP/USD levels to watch
As for technical levels, next resistances could be faced at 1.6863 (May 20 high), 1.6882 (May 13 high) and 1.6900 (psychological level). On the other hand, supports could be found at 1.6800 (psychological level), 1.6783 (May 16 low) and 1.6732 (50-day SMA/May 15 low).
The GBP/USD reached a 6-day high of 1.6863 immediately after inflation data, with the annual CPI growing by 1.8% versus 1.7% expected, but stalled at the 50% retracement of the 1.6995/1.6732 and pulled back. With the subsequent dip being contained by the 1.6820 zone, the pair steadied in a range over the last hours and it is currently trading at 1.6827, still up 0.10% on the day.
"After a strong start to the month, sterling has lacked real direction in recent sessions. The pound remains the best performing developed world currency on a 12 mth view but last week's publication of the BoE's Quarterly Inflation Report put paid to further upside. The Report was accused of being dovish", said Jane Foley, Senior Currency Strategist at Rabobank International. "We maintain the view that the Bank’s tone has been consistent for some time but that it appeared dovish mostly because market expectations regarding the timing of the first BoE rate hike of the cycle has become overly optimistic".
GBP/USD levels to watch
As for technical levels, next resistances could be faced at 1.6863 (May 20 high), 1.6882 (May 13 high) and 1.6900 (psychological level). On the other hand, supports could be found at 1.6800 (psychological level), 1.6783 (May 16 low) and 1.6732 (50-day SMA/May 15 low).