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    IronFX Essential Intraday Comment | 23/07/2015

    •The dollar was lower against almost all of its G10 peers during the European morning Thursday, ranging from -0.15% against JPY to -0.85% vs NZD. It was higher only against GBP, while it was virtually unchanged against NOK.

    • The British pound plunged after the country’s retail sales unexpectedly fell in June, disappointing investors who were expecting a strong reading. Given the near-zero inflation rate and the strong wage growth, real wages are increasing and should support spending. Nevertheless, the data suggests this is not yet the case, which raises questions over BoE officials’ expectations that inflation is likely to pick up notably towards the end of the year. EUR/GBP surged to find resistance fractionally below 0.7060, while GBP/USD found some buy orders near 1.5585. Even though GBP weakened sharply on the news, I would expect it to gradually recover its losses given the BoE hiking expectations are in focus.

    • GBP/JPY hit resistance at 193.90 (R1) and slid during the European morning Thursday following the disappointing UK retail sales for June. However, the decline was halted well above the prior low of 192.35 (S1). In my view, only a clear dip below that line could turn the short-term picture negative. On the other hand, I believe that the move that could reinforce the short-term uptrend started back on the 8th of July is a break above the 194.50 (R2) resistance line. As a result I would sit to the sidelines for now. The MACD, although positive, has just crossed below its trigger line, but the RSI rebounded from near its 50 line and now is pointing up. These mixed momentum signals corroborate my stance to stay flat at the moment. Nevertheless, although I believe that the short-term bias is neutral, I see a positive overall trend. On the daily chart, I see that on the 8th of July, the rate rebounded from the 185.00 psychological zone, which stands pretty close to the 50% retracement level of the 14th of April – 24th of June rally. As a result, I would treat any possible short-term declines as a corrective move.

    • Support: 192.35 (S1), 190.70 (S2), 189.25 (S3)

    • Resistance: 193.90 (R1), 194.50 (R2), 195.80 (R3)

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