GBP/USD May Low (1.5088) on the Radar Ahead of BoE Carney Speech

Talking Points:

- GBP/USD Eyes May Low (1.5088) Ahead of BoE Governor Carney’s Speech.

- Euro September Opening-Range Remains in Focus Ahead of Slowing Euro-Zone CPI.

- USDOLLAR Holds Previous Day’s Range Despite Upbeat Consumer Confidence.

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GBP/USD

Chart - Created Using FXCM Marketscope 2.0

• With GBP/USD slipping to a fresh monthly low of 1.5128, the pair may work its way back towards the May low (1.5088) as it continues to search for support, while the Relative Strength Index (RSI) retains the bearish formation from earlier this year.
• With Bank of England (BoE) Governor Mark Carney scheduled to speak later today, hawkish comments from the central bank head may heighten the appeal of the sterling should the fresh rhetoric highlight a growing dissent within in the Monetary Policy Committee (MPC).
• DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since August 21, but the ratio appears to be climbing back towards recent extremes as it widens to +2.95, with 75% of traders long.

EUR/USD

• EUR/USD may continue to track sideways going into the end of September as the pair largely retains the opening-monthly range; may see the Euro continue to benefit off of the risk-off environment as market participants treat the single-currency as a ‘funding-currency.’
• With the Euro-Zone’s Consumer Price Index (CPI) expected to show a slowdown in the headline & core rate of inflation, a marked deterioration in price growth may put increased pressure on the European Central Bank (ECB) to further embark on its easing cycle in an effort to achieve its one and only mandate to ensure price stability.
• Despite the long-term bearish outlook for EUR/USD, may see the pair mount a larger recover as the RSI retains the bullish formation carried over from back in March.

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USDOLLAR(Ticker: USDollar):

Chart - Created Using FXCM Marketscope 2.0

• Despite the unexpected uptick in the Conference Board’s Consumer Confidence survey, the Dow Jones-FXCM U.S. Dollar may continue to face range-bound prices going into the end of the month as it holds within the previous day’s range; still waiting for a break of the bearish RSI formation to favor a resumption of the long-term bull trend.
• With ADP Employment expected to show another 190K expansion, may largely shape market expectations for U.S. Non-Farm Payrolls (NFP), but the fresh comments coming out of the Federal Reserve may take increase attention as New York Fed President William Dudley along with Chair Janet Yellen and Governor Lael Brainard are scheduled to speak over the next 24-hours.
• Still waiting for a close above 12,082 (61.8% expansion) to favor a move into 12,162 (April high) to 12,176 (78.6% expansion).

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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