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. See our updated Privacy Policy here.

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
Subscribe
Please try again
More View more
GBP/USD Risks Further Losses as Bearish Outside-Day Takes Shape

GBP/USD Risks Further Losses as Bearish Outside-Day Takes Shape

David Song, Strategist

Talking Points:

- GBP/USD Carves Outside-Day; U.K. 4Q Gross Domestic Product (GDP) on Radar.

- EUR/USD Searches for Support Following as ECB Removes Floor on Interest Rates.

- USDOLLAR Clears Near-Term Hurdle- Eyes Monthly High (12,081).

For more updates, sign up for David's e-mail distribution list.

GBP/USD

GBP/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • GBP/USD fails to retain the bullish reaction to the 1.7% rise in U.K. Retail Sales, with the pair carving an outside day; close below 1.5400 (38.2% retracement) to 1.5420 (78.6% expansion) may spur a further decline especially as the Relative Strength Index (RSI) largely preserves the bullish formation from back in May.
  • With the U.K. Gross Domestic Product (GDP) report expected to show the growth rate expanding another 2.4% in the third-quarter, a dismal development may produce near-term headwinds for the sterling as it provides the Bank of England (BoE) with greater scope to further delay the normalization cycle.
  • DailyFX Speculative Sentiment Index (SSI)shows retail crowd remains net-long GBP/USD since August 21, but the ratio appears to be working its way back towards recent extremes as it advances to +1.77, with 64% of traders long.

EUR/USD

EUR/USD Daily Chart
  • EUR/USD remains at a risk for a further decline as the European Central Bank (ECB) shows a greater willingness to further extend/expand its quantitative easing (QE) program while opening the door for a further decline in the deposit-rate.
  • As the ECB removes the floor on interest rates, the euro-dollar may continue to give back the rebound from back in late-July especially as the RSI fails to retain the bullish formation from earlier this year.
  • A break of the September low (1.1086) may expose the next key downside figure around 1.1000 handle (78.6% retracement).

Join DailyFX on Demand for Real-Time SSI Updates Across the Majors!

Read More:

Price & Time: EUR/USD – The Real Deal?

EURCAD Bulls Brace for ECB- Rally Vulnerable Sub 1.4955

USDOLLAR(Ticker: USDollar):

Index

Last

High

Low

Daily Change (%)

Daily Range (% of ATR)

DJ-FXCM Dollar Index

12006.49

12010.95

11934.82

0.46

161.49%

GBP/USD Risks Further Losses as Bearish Outside-Day Takes ShapeUSDOLLAR Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Dow Jones-FXCM U.S. Dollar looks poised for a larger rebound as it clears the Fibonacci overlap around 11,951 (38.2% expansion) to 11,965 (23.6% retracement); will watch for a break of the bearish RSI formation from June to favor a resumption of the long-term upward trend.
  • Despite the limited market reaction to the U.S. data prints, the 4.7% expansion in Existing Home Sales may keep the Federal Reserve on course to raise the benchmark interest rate later this year as the central bank looks for a stronger recovery in the second-half of 2015.
  • The near-term advance brings the key near-term resistance zones back into play around 12,049 (78.6% retracement) to 12,082 (61.8% expansion).

Join DailyFX on Demand for Real-Time SSI Updates!

GBP/USD Risks Further Losses as Bearish Outside-Day Takes Shape

--- Written by David Song, Currency Analyst

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

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

New to FX? Watch this Video

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

DISCLOSURES