We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Signals from retail trader positioning hint that the FTSE 100 and S&P 500 could have room for weakness ahead as the CAC 40 attempts to climb towards key resistance. Get your European #equities update from @ddubrovskyFX here:https://t.co/gepciUHqxT https://t.co/BAJ9f1nTwE
  • 🇯🇵 Retail Sales YoY Actual: -13.7% Expected: -11.5% Previous: -4.7% https://www.dailyfx.com/economic-calendar#2020-05-28
  • 🇯🇵 Industrial Production YoY Prel Actual: -14.4% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-05-28
  • 🇯🇵 Retail Sales YoY Actual: -13.7% Expected: -11.5% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-05-28
  • Heads Up:🇯🇵 Retail Sales YoY due at 23:50 GMT (15min) Expected: -11.5% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-05-28
  • Heads Up:🇯🇵 Industrial Production YoY Prel due at 23:50 GMT (15min) Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-05-28
  • 🇯🇵 Unemployment Rate Actual: 2.6% Expected: 2.7% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2020-05-28
  • Heads Up:🇯🇵 Unemployment Rate due at 23:30 GMT (15min) Expected: 2.7% Previous: 2.5% https://www.dailyfx.com/economic-calendar#2020-05-28
  • The US Dollar has fallen substantially this week as the Dollar Basket (DXY) skirts the edge of lower-lows as it forfeits the ground it captured in the March rally. Get your $USDCAD market update from @PeterHanksFX here: https://t.co/JW6ohifDeF https://t.co/twToadCrtr
  • The #Euro is attempting to break above range resistance capping upside progress for nearly two months. Momentum and sentiment studies warn it may fail. Get your $EURUSD market update from @IlyaSpivak here:https://t.co/4tpAAC1ZpV https://t.co/sCZskNhfJ4
GBP/USD Falls Back to Trend Support from November

GBP/USD Falls Back to Trend Support from November

2018-04-20 11:45:00
Christopher Vecchio, CFA, Senior Strategist
Share:

Talking Points:

- The British Pound slumped hard late in yesterday's session following comments by BOE Governor Mark Carney.

- The BOE chief's remarks saw May rate hike odds from from near 85% to 52%.

- Sentiment for the British Pound is now neutral.

For longer-term technical and fundamental analysis, and to view DailyFX analysts’ top trading ideas for 2018, check out the DailyFX Trading Guides page.

The US Dollar (via the DXY Index) has extended its run of gains this week, on pace for its fourth consecutive day in the black amid a rise in US Treasury yields. USD/JPY continues to push higher despite US equity markets stalling, while EUR/USD has slipped back to trendline support dating to April 2017, the pivot lows seen before the first round of the French elections.

But the biggest mover over the past 24-hours has been the British Pound. Following Bank of England Governor Mark Carney's comments yesterday, overnight index swaps' implied probability of a rate hike next month dropped from near 85% to below 50% yesterday.

The BOE chief noted that there has been weakness in some recent data, all of which has come across the wires in the past week: the bevy of price data - CPI, PPI, and RPI - all came in softer than anticipated; despite the unemployment rate remaining at multi-decade lows, jobs growth and wage growth are uneven; and retail sales figures missed expectations.

What was once seen as a sure thing is now being drawn into question. Fellow BOE policymaker Michael Saunders' remarks earlier today has helped stabilize rate expectations, with OIS now pricing in a 52% chance of a move in May.

Price Chart 1: GBP/USD Daily Timeframe (August 2017 to April 2018)

GBP/USD Falls Back to Trend Support from November

After completing the upside measured move in the bullish falling wedge earlier this week, GBP/USD has now fallen back to key uptrend support, both the ascending channel in place since the March 1 low as well as trendline support dating back to the November 2017 low.

For now, the weakness seen in the GBP-complex may just be nervous longs taking profit amid the injection of uncertainty over the near-term rate path. According to the CFTC's COT report for the week ended April 10, speculators were long to the tune of +8K net-long contracts. Unfortunately, when the update to the COT figures are released later today, the decline seen over the past 24-hours won't be reflected: they cover the period ended through April 17.

If GBP/USD is truly topping here, then a move below the April 5/6 swing low near 1.3975 will have to give way. Otherwise, given that the composition of voters appears set for either a 6-3 or a 5-4 vote in favor of a rate hike in May, it would reason that buying weakness in the British Pound ahead of the May policy meeting remains an opportunity for traders who had missed upside over the past few months.

Read more: DXY Index Carving Out Inside Day, Lighter Calendar Ahead

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

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.

DISCLOSURES

News & Analysis at your fingertips.