GBP/USD Hammers as MACD Cross Develops. GBP/JPY Tests Range Top
- GBPUSD nears daily MACD crossover below zero line.
- GBPJPY attempting to carve out space above channel resistance.
- Forex economic calendar littered with US event risk next few days.
The British Pound's slow erosion over the past three weeks may be at a stalling point after the trifecta of PMI data for May this week offered a very optimistic picture of the UK economy. True, the figures on the whole for May were slightly off the pace for April; yet with the three indexes well-above the 50 expansion/contraction line, growth in the UK appears to be powering ahead.
Nevertheless, economic data out of the UK has slumped on a relative basis, keeping pressure on the Sterling in what has otherwise been a strong year for the world's oldest currency. The Citi Economic Surprise Index, a proxy for data momentum, has slipped to -1.5 (indexed to 100 at the beginning of the year, the CESI is 48.9).
The timing of the weaker fundamental streak for the British Pound is also coinciding with a modest steadying of US economic data, highlighted by the explosive auto sales figures seen in May. In conjunction with technical evidence of a more concerted selloff potentially lingering in GBPUSD, we find that the recent range in Cable between $1.6690 and $1.6780 offers a definable range to work around over the coming days.
See the video above for an indepth look at the developing GBPJPY and GBPUSD technical pictures on the H4 and D1 timeframes.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail firstname.lastname@example.org
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.