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1 Oct 2013
GBP/USD moves higher ahead of US data; 1.6300 “in play”
FXstreet.com (Athens) – The GBP/USD is trading again upwards the last hour – after moving sideways for a couple of hours – showing that the cable has not lost its uptrend momentum.
GBP/USD moves higher paving the way for 1.6300
The GBP/USD is heading steadily upwards today after the shutdown of the American government. Traders should not find out of the blue the sterling’s uptrend movement as markets currently put the dollar's liquidity and supposed safety second to its budgetary risk, (especially taken for granted that there is also an impending debt ceiling deadline in around 2 weeks). What’s more, behind the “American dream default on its own debt”, the sterling seems to continue to set up an uptrend momentum due to the UK data releases. Elaborating on, the UK manufacturing sector continued to expand at a marked pace during September, to round off its strongest quarterly performance since the opening quarter of 2011. Finally, the labor market also showed further signs of improvement, as the rate of job creation climbed to a 28-month peak. Therefore, as we witnessing a set up of consecutive solid UK data, traders should bear in mind that BoE officials may adopt a more hawkish tone for monetary policy committee at the 10th of October, as Mark Carney, Paul Tucker, and Paul Fisher are scheduled to speak in the forthcoming days.
Strategic Bias and Technical Outlook on the GBP/USD
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “GBP/USD seems to have found short term support at 1.5954. While a weekly TD perfected set up exists and the 2009-2013 downtrend at 1.6331 directly overhead caps, the risk remains on the downside.” Generally speaking, at the time of writing we are witnessing that the cable has broken decently the September high as of 1.6162, hovering around 1.6230 level (38.2% Fibonacci). A break higher could lead to the 50% Fibonacci expansion as of 1.6322 area, which is more closely to the year highs (1.6381 as of early January 2013).
GBP/USD moves higher paving the way for 1.6300
The GBP/USD is heading steadily upwards today after the shutdown of the American government. Traders should not find out of the blue the sterling’s uptrend movement as markets currently put the dollar's liquidity and supposed safety second to its budgetary risk, (especially taken for granted that there is also an impending debt ceiling deadline in around 2 weeks). What’s more, behind the “American dream default on its own debt”, the sterling seems to continue to set up an uptrend momentum due to the UK data releases. Elaborating on, the UK manufacturing sector continued to expand at a marked pace during September, to round off its strongest quarterly performance since the opening quarter of 2011. Finally, the labor market also showed further signs of improvement, as the rate of job creation climbed to a 28-month peak. Therefore, as we witnessing a set up of consecutive solid UK data, traders should bear in mind that BoE officials may adopt a more hawkish tone for monetary policy committee at the 10th of October, as Mark Carney, Paul Tucker, and Paul Fisher are scheduled to speak in the forthcoming days.
Strategic Bias and Technical Outlook on the GBP/USD
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “GBP/USD seems to have found short term support at 1.5954. While a weekly TD perfected set up exists and the 2009-2013 downtrend at 1.6331 directly overhead caps, the risk remains on the downside.” Generally speaking, at the time of writing we are witnessing that the cable has broken decently the September high as of 1.6162, hovering around 1.6230 level (38.2% Fibonacci). A break higher could lead to the 50% Fibonacci expansion as of 1.6322 area, which is more closely to the year highs (1.6381 as of early January 2013).