Why can’t GBP/USD push higher?
The UK released its Claimant Count earlier today for September and showed a decline for the seventh straight month! 51,100 people stopped claiming unemployment benefits vs an expectation of -46,000 and August’s reading of -58,600. A good reading should be good for the local currency, as it increases that chances of a tapering (less currency in the system) or an interest rate increase at the next meeting.
Everything you need to know about the Bank of England
In addition, the news out of the UK has been positive since the weekend, yet GBP/USD can’t maintan a bid. Over the weekend, BOE member Saunders said that he’s concerned that a pickup in inflation from capacity pressures and higher pay growth “could become more persistent unless monetary policy responds”. He also said that he “thinks it is appropriate that the markets have moved to pricing a significantly earlier path of tightening than they did previously. In addition, BOE Governor Baily said there is potential for a very damaging period of inflation. These comments sound as if a complete end to the BOE’s bond buying program, or even an interest rate increase, may happen at the BOE’s next meeting on November 4th.
Trade GBP/USD now: Login or Open a new account!
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
Given the Claimant Count Change and the positive comments from BOE board members, traders may expect the value of GBP/USD to be much higher. The pair closed Friday at 1.3611 and is currently trading near 1.3600. GBP/USD had been trading in a symmetrical triangle since July 20th, and finally broke lower on September 28th. The pair spiked through the 50% retracement level from the low on September 24th,2020 to the highs of June 1st, near 1.3450 and bounced to resistance at the bottom trendline of the symmetrical triangle near 1.3600. Price has been oscillating near this level since October 4th.
Source: Tradingview, Stone X
On a 240-minute timeframe, GBP/USD bounced from the lows was to 1.3673, which was resistance at the bottom trendline of the longer-term symmetrical triangle, as well as, the 50% retracement from the September 14th highs to the September 29th lows. As mentioned above, the pair is currently oscillating around the 1.3600 level. Horizontal support below is at 1.3532 and then the recent lows from September 29th at 1.3388. Strong resistance is above at the October 11th highs of 1.3674, ahead of the 61.8% Fibonacci retracement level from the recently mentioned timeframe at 1.3722 and the 50-Day Moving Average of 1.3726.
Source: Tradingview, Stone X
There is information in price action (or lack of it) after news or data is released, and price doesn’t move in the direction one would expect. If GBP/USD isn’t moving higher on positive news, one has to consider what will make it move higher?
Learn more about forex trading opportunities
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.
ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.
City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.
The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.
The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.
The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
© City Index 2024