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    IronFX Intraday Comment | GBP/USD | 01/10/2015

    • The dollar traded lower against almost all of its G10 peers during the European morning Thursday, ranging from -0.15% against JPY to -0.70% vs NOK. The greenback was virtually unchanged against CHF.

    • The British pound gained today after the UK manufacturing PMI for September beat estimates and came at 51.5, down only fractionally from 51.6 in August and above consensus estimate of a decline to 51.3. This could increase speculation that tomorrow’s construction PMI is going to beat estimates as well and add to expectations of strong growth in Q3. A positive surprise in construction PMI tomorrow could give GBP bulls enough reasons to reverse some of the recent losses.

    • Eurozone’s final manufacturing PMI for September was also released. As usual, the final figure confirmed the initial estimate, thus the market reaction was limited on the news. The improvement in the French figure and the modest decline in the German reading kept the bloc’s PMI stable. EUR/USD gained a bit at these releases, but the advance was halted well below our 1.1200 resistance level. I still believe that the short-term bias is negative and I would treat today’s minor bounce as a renewed selling opportunity.

    GBP/USD traded higher during the European morning Thursday, after it hit support fractionally above the 1.5100 (S2) support line. The rate is now back above the 1.5135 (S1) line, although the short-term trend remains negative, there is the likelihood for the rebound to continue, perhaps for a test at the upper bound of the near-term downside channel, or for another test at the 1.5210 (R1) line. Further rebound is also supported by our momentum studies. The RSI rebounded from its upside support line, while the MACD, although negative, still stands above its trigger line. Furthermore, there is still positive divergence between both the indicators and the price action. On the downside, a break below 1.5100 (S2) is needed to confirm a forthcoming lower low on the 4-hour chart and signal the resumption of the near-term downtrend. Something like that could pave the way for the 1.5030 (S3) barrier, defined by the low of the 24th of April. Plotting the daily chart, I see that Cable remains below the 80 day exponential moving average. That moving average shifted somewhat down, which turns the overall picture cautiously negative in my opinion.

    • Support: 1.5135 (S1), 1.5100 (S2), 1.5030 (S3)

    • Resistance: 1.5210 (R1), 1.5240 (R2), 1.5290 (R3)


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