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12 Mar 2014
GBP/USD moving into neutral
FXStreet (Guatemala) - GBP/USD has come off and the markets are starting to turn from bullish Q1 to bearish further down the road.
Carney played down the need to start thinking about raising rates soon, saying there is spare capacity yet and on the back of that we have seen some of the pricing in sterling brought in a little. Yields have come off and the pound is trading back onto a comfortable level on the 1.66 handle and monthly pivot point. Markets are taking note of the recent concerns in the governments finances after the FT wrote an article ahead of the 2014 Budget that is scheduled for March 19th that it could be facing a potential £20b hole. Sterling has started to move into a neutral position while it trades close to the monthly pivot at 1.6600. Naeem Wahid, FX Strategist at Bank of America Merrill Lynch commented, "We have been outright GBP bulls throughout 1Q, but have now temporarily reversed short in GBP/USD. Other GBP crosses are also breaking lower, as real-money overweight GBP positions become extended and are at risk of being reduced."
GBP/USD levels
The 20 DMA at 1.6677, the 50 DMA is 1.6538 and the 200 DMA is 1.5994. RSI (14) reads 56.56. Supports are ascending from 1.6538, 1.6559, 1.6583 and 1.6596. Spot is 1.6620 while resistances are 1.6653, 1.6666, 1.6706 and 1.6750.
Carney played down the need to start thinking about raising rates soon, saying there is spare capacity yet and on the back of that we have seen some of the pricing in sterling brought in a little. Yields have come off and the pound is trading back onto a comfortable level on the 1.66 handle and monthly pivot point. Markets are taking note of the recent concerns in the governments finances after the FT wrote an article ahead of the 2014 Budget that is scheduled for March 19th that it could be facing a potential £20b hole. Sterling has started to move into a neutral position while it trades close to the monthly pivot at 1.6600. Naeem Wahid, FX Strategist at Bank of America Merrill Lynch commented, "We have been outright GBP bulls throughout 1Q, but have now temporarily reversed short in GBP/USD. Other GBP crosses are also breaking lower, as real-money overweight GBP positions become extended and are at risk of being reduced."
GBP/USD levels
The 20 DMA at 1.6677, the 50 DMA is 1.6538 and the 200 DMA is 1.5994. RSI (14) reads 56.56. Supports are ascending from 1.6538, 1.6559, 1.6583 and 1.6596. Spot is 1.6620 while resistances are 1.6653, 1.6666, 1.6706 and 1.6750.