News & Analysis at your fingertips.

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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
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
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
GBP/USD
Bullish
USD/JPY
Bearish
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
  • It was a quiet week in Aussie as $AUDUSD put in its second consecutive week of indecision. But taking a more granular look highlights the potential for a reversal scenario. Get your #currencies update from @JStanleyFX here: https://t.co/PPK20nubAf https://t.co/0nfmRRFNnz
  • The S&P 500 pushed the market's comfort with a head-and-shoulders pattern through Friday's close. What should we look for in technical patterns, overlapping fundamental tides and speculative positioning for the likes of $EURUSD next week? https://www.dailyfx.com/forex/video/daily_news_report/2020/09/19/EURUSD-Pressure-Building-while-Anxious-Traders-Weigh-Did-SP-500-Break.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/lgVJVwi8th
  • Sterling remains trapped by overarching fundamentals drivers and both $GBPUSD and $EURGBP are going to have to wait until the Brexit dust settles. Get your #currencies update from @nickcawley1 here: https://t.co/vF1K1cy0nd https://t.co/NSA7qiQihc
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/d9EmTOHyTv
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true.Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/xqbUxwWgTZ
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/Gi8LHCT5sB
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/FFmRYyx4ou
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here: https://t.co/aVAzFypAg1 https://t.co/r7aJb4qpqc
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/ERyiY47G5H https://t.co/fIGDaDW21V
  • ...even more incredible is net speculative futures positioning in $EURUSD, rounding off from a record net long position...and it hasn't even cleared 1.20... https://t.co/SfyYTMTT1x
British Pound Dangerously Close to Larger Breakdown

British Pound Dangerously Close to Larger Breakdown

2015-03-07 01:38:00
David Rodriguez, Head of Product
Share:
British Pound Dangerously Close to Larger Breakdown

Fundamental Forecast for British Pound: Neutral

The British Pound finished the week sharply lower versus the resurgent US Dollar as it fell for five consecutive trading days and finished barely above key multi-year lows. Yet fundamentals for the UK currency remain stable, and we expect it to outperform the Euro and other currencies through the foreseeable future.

A relatively empty week of UK economic data and events suggests that Sterling volatility will slow in the days ahead, but clearly one-sided price momentum warns that a test of key price support at $1.50 is imminent. A break below the psychologically significant level would leave little in the way of price support until five-year lows near $1.48 and eventually the post-financial crisis trough near $1.4250. Yet we put relatively low odds on such a large Sterling move—particularly as the UK currency holds its ground versus the Euro and other major counterparts.

The British Pound rallied noticeably versus the downtrodden Euro as the European Central Bank announced it would begin fairly aggressive Quantitative Easing policies from March 9, and indeed sharply diverging central bank policies leave the GBP in an enviable position. Overnight Index Swaps show that traders predict the Bank of England and the US Federal Reserve will be the only two G10 central banks to raise interest rates in the coming 12 months. All else equal, we believe this fact will continue to support both the GBP and USD through the foreseeable future. That said, the US Dollar has arguably rallied far more than interest rate differentials have changed.

Sharp GBPUSD declines seem unsustainable given a sanguine UK economic outlook, but calling for a meaningful US Dollar reversal has been a fool’s errand. We’ll keep an eye on any significant surprises out of upcoming UK Manufacturing Production and NIESR GDP growth figures to drive potential GBP volatility. Yet the bigger issue remains whether the USD can continue on its recent tear and break fresh highs versus the Sterling and other major counterparts.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES