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GBP/USD Holds Range Ahead of BoE Testimony- RSI Trigger on Tap?

GBP/USD Holds Range Ahead of BoE Testimony- RSI Trigger on Tap?

David Song,

Talking Points:

- GBP/USD Threatens Bearish RSI Formation- BoE Testimony in Focus.

- EUR/USD Pullback Eyes Former Support- Dovish ECB on Tap?

- USDOLLAR Mounts Larger Rebound Ahead of Fed Rhetoric.

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GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • GBP/USD may continue to retrace the decline from the previous month as the Relative Strength Index (RSI) threatens the downward trend from back in May; bullish trigger may highlight a larger advance over the coming days.
  • Despite the light economic docket, we will keep a close eye on the news wires as BoE’s Andrew Bailey, Ian McCafferty and Mark Carney are scheduled to testify in front of the Treasury Committee; will we see more hawkish commentary?
  • Even though DailyFX Speculative Sentiment Index (SSI) shows retail crowd remains net-long GBP/USD since August 21, the ratio remains off of recent extremes as it sits at 1.60, with 62% of traders long.


EUR/USD Daily Chart
  • EUR/USD remains at risk for a larger correction amid growing speculation for a major announcement at the European Central Bank’s (ECB) October 22 interest decision; RSI may highlight a larger decline should the oscillator fail to retain the bullish formation from back in March.
  • Even though the ECB stands ready and willing to further embark on its easing cycle, more of the same from central bank President Mario Draghi may heighten the appeal of the Euro as market participants weigh the outlook for monetary policy.
  • Will keep a close eye on the former resistance zone around 1.1260 (50% retracement) to 1.1270 (38.2% retracement) for new support.

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Read More:

The Weekly Volume Report: Sharp Uptick In Sterling Turnover

Chinese Growth Falls Below 7% for First Time Since Financial Collapse

USDOLLAR(Ticker: USDollar):

IndexLastHighLowDaily Change (%)Daily Range (% of ATR)
DJ-FXCM Dollar Index11926.8611934.1511905.650.0060.71%
USDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar may mount a larger recover amid the recent string of higher-lows, but ongoing mixed data coming out of the world’s largest economy may continue to dampen the appeal of the greenback as the Fed remains in a wait-and-see mode.
  • Beyond the slew of Fed rhetoric, will keep a close eye on the slew of housing-market data as the central bank remains upbeat on the real economy.
  • The Fibonacci overlap around 11,951 (38.2% expansion) to 11,965 (23.6% retracement) stands on the radar as the USDOLLAR continues to rebound from the monthly low (11,854).

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--- Written by David Song, Currency Analyst

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

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