The GBPUSD was probably the largest trade today for the main pairs, as it came under renewed pressure from the bears as UK inflation data was lacklustre coming in at 0.2% y/y. There was also no surprise from Mark Carney as he once again reaffirmed his stance that the UK economy was sometime of lifting interest rates, as he cited global shocks and the risk from Europe as a reason to hold fire for some time. But, also a need for inflationt rates to lift in the UK economy to even justify a move at this stage as the drop in oil prices has impacted the energy factor when it comes to computing the inflation index.
The GBPUSD fluctuations can be seen strongly in the charts today, and the volatility has not let up since the start of the year. Certainly the bears have looked to take control and push the GBPUSD lower and Mark Carney certainly gave them the ability today. Markets will now, however, be eyeing up support levels to play off and the next levels down which are likely to be found on the weekly levels at 1.4082 and 1.3916. These levels are seen as extremely strong in the current market, but the trend is certainly much strong and at 1.3916 we could see some serious fight back as the GBPUSD has traditionally been very strong around this level.
Oil (WTI) markets continue to struggle to find any real market momentum at present, as there is no real fundamental justification for higher highs until we see moth balling of oil fields as the supply glut continues. Despite all of this, people are already talking up the bottom of the market, and this in itself is a trap as you can't catch a falling knife and far too many traders try to call a market rather than let it play out.
With resistance at 29.17 looking to contain any bullish movements the market sentiment is that the bulls are running out of steam, and a record amount of shorts are still being held when it comes to the oil market. That's not to say that the market is right, but certainly and upward momentum is likely to find stiff resistance at 32.04 and the 20 day Moving Average which has repeatedly acted as dynamic resistance as the market has trended down.
NZDUSD traders have surprised the market and myself by pushing higher on the back of a weaker USD today, this is a little surprising as dairy prices continued to show weakness and this will have a flow on effect back into the economy. Resistance has so far been resolute in holding its ground on the charts at 0.6517 and tonight's CPI data will be interesting as to how it influences prices, given the recent bearish nature of the NZDUSD.
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