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16 Sep 2013
GBP/USD capped by 1.6000 and volatility
FXstreet.com (Athens)- While the GBP/USD soared on European opening trading session, amidst diminishing Syrian’s risk as well as on Yellen “on leading position for the Fed’s top chair”, it seems that is lacks of fuel to sustain its gains.
Will the GBP/USD find the momentum to touch the 1.6000 ahead of FOMC minutes?
Around 9-month peaks, the pair sustains high performance and registers over 200 pips gained this month. “With a job market 'far from satisfactory' and a promise to adjust monetary policy depending on economic conditions, it would not be a surprise if the Fed postpones the reduction of monthly asset purchases until the next meeting in late October,” Ilian Yotov FX strategist and Founder of AllThingsForex suggests. What’s more we could also add that the above belief is getting very realistic, if we take for granted that Yellen, the very dovish Vice-Woman of Fed will finally substitute Bernanke when he steps down. However, traders should not forget that “a Fed taper of $10-15bn pr month alongside with more dovish comments” is likely already priced to a more or less extent. Reuters said that Bill Gross from Pimco, “Summers's exit makes Monday a huge day for curve/risk on trades.”
Technical Outlook and Strategic Bias on GBP/USD
According to Karen Jones, Head Technical Analyst of Commerzbank, “Above 1.5830 would introduce scope to 1.6036, the 78.6% retracement of the move down from December 2012, which is expected to hold and provoke failure.” It’s of high significance to point out that the pair was in its daily low on very early Asian trading day on Sunday (1.5869), but after after Summers news the pound was heavily boosted to touch as of a high of 1.5957 in early European trading. The cable didn’t manage to sustain its almost 100 pips gains and now trading at 1.5935. However, despite the very light calendar day investors should not be taken aback if the cable, sooner rather than later, breaks the 1.6000 resistance.
Will the GBP/USD find the momentum to touch the 1.6000 ahead of FOMC minutes?
Around 9-month peaks, the pair sustains high performance and registers over 200 pips gained this month. “With a job market 'far from satisfactory' and a promise to adjust monetary policy depending on economic conditions, it would not be a surprise if the Fed postpones the reduction of monthly asset purchases until the next meeting in late October,” Ilian Yotov FX strategist and Founder of AllThingsForex suggests. What’s more we could also add that the above belief is getting very realistic, if we take for granted that Yellen, the very dovish Vice-Woman of Fed will finally substitute Bernanke when he steps down. However, traders should not forget that “a Fed taper of $10-15bn pr month alongside with more dovish comments” is likely already priced to a more or less extent. Reuters said that Bill Gross from Pimco, “Summers's exit makes Monday a huge day for curve/risk on trades.”
Technical Outlook and Strategic Bias on GBP/USD
According to Karen Jones, Head Technical Analyst of Commerzbank, “Above 1.5830 would introduce scope to 1.6036, the 78.6% retracement of the move down from December 2012, which is expected to hold and provoke failure.” It’s of high significance to point out that the pair was in its daily low on very early Asian trading day on Sunday (1.5869), but after after Summers news the pound was heavily boosted to touch as of a high of 1.5957 in early European trading. The cable didn’t manage to sustain its almost 100 pips gains and now trading at 1.5935. However, despite the very light calendar day investors should not be taken aback if the cable, sooner rather than later, breaks the 1.6000 resistance.